The milk price rollercoaster may be on the way back down.
Despite the dairy industry appearing to be exiting ’a long and prolonged crisis’, the milk price rollercoaster may be on its way back down.
That was the message from analyst and Dairy Farmer columnist Ian Potter at the South Wales Dairy Conference.
Another uncertainty for the future milk price lies in the EU intervention stores, in the form of 355,000 tonnes of milk powder, shortly approaching its best before date.
Despite efforts to shift this powder, Mr Potter said just 40 tonnes have been cleared from stores, and if it cannot be dispatched as aid, it will be soon hitting the open market, which could prove to further worsen the milk price.
Mr Potter guessed ’some processors might just be ballsy enough to bring the price back on April 1, although some have said its ’stand on’ for March.
He said: "Spot prices are back 35 per cent in two months and easing back and bulk fresh cream has dropped 25 per cent. Dairy markets will keep falling if this milk keeps flowing as erratically as it does."
Adding to the uncertainty of future farm incomes was the future of the country’s agricultural policy.
Mark Berrisford-Smith, head of economics for HSBC UK commercial banking, reassured the largely farmer-based audience the industry would not be forgotten in post-Brexit politics, as although it equated for a relatively small portion of the UK’s gross domestic product at primary production level, it became more valuable ’when we consider that we all need to eat’.
But Mr Berrisford-Smith said it ’does not matter what Defra thinks’ as it would be the Treasury which would ultimately make the decisions.
On the back of Mr Berrisford-Smith’s comments, Mr Potter added: "By no means do I have the confidence that we have the people to draw up an agricultural policy. What I want to see is one organisation pulling other organisations together rather than people tying to point score.
"We need to pull together and stand up and be counted, otherwise we will be side lined. But at the moment not even the NFU sectors can agree with one another."