You are viewing 1 of your 2 free articles

You’ll need to join us by becoming a member to gain more access.
Already a Member?

Login Join us now

'Take the higher prices but use the money wisely' - dairy farmers warned off major investment

Farmers need to ‘make hay while the sun shines’ and not use higher prices as a driver for major investment.

Twitter Facebook
Share This

'Take the higher prices but use the money wisely' - Dairy farmers warned off major investment #teamdairy

It follows comments from Arla chief executive Peder Tuborgh warning of a cream and butter shortage at Christmas.


John Allen, Kite Consulting, has urged caution from farmers as demand drives up their milk price and told them to remember the price was likely to go back down again.


“With our clients we are saying be cautious,” he said.


“It is going to put prices up considerably. Take the higher prices, do not look a gift horse in the mouth.


“But use the money wisely. Do not use short term price hike as a reason for major investment. Take the profit which you need, rebuild your balance sheet and pay off debt,” he added.


He advised farmers to ‘lock in’ their feed prices now as these were beginning to rise to enjoy the full benefits of the rises.




Dairy analyst Chris Walkland said higher prices could halt the high demand for butter which helped to drive the price.


“Farmers need to make hay while the sun shines,” he said.


Shoppers have switched back to buying butter from margarine following research highlighting its health benefits in the media.


And he had limited sympathy for consumers and retailers when price increased as they had enjoyed ‘extremely good value’ dairy products while farmers suffered low prices.


But he warned major price hikes would drive manufactures to switch back away from butter.


“Manufacturers will substitute it for inferior vegetable based products,” he said.


“It could take three months or six months but it will happen at those sort of prices, the difference between those is five-fold. Prices will then come off the boil.”


But he added it did not necessarily mean retail prices would increase as retailers were making big enough margins on many dairy products to absorb the costs themselves.

Twitter Facebook
Rating (0 vote/s)
Post a Comment
To see comments and join in the conversation please log in.

More News

Trade Secretary wants cheap chlorinated chicken to enter UK

Chlorine-washed chicken, which has been banned in the EU, will be allowed to enter the UK after Brexit if International Trade Secretary Liam Fox gets his way.

Seasonal agricultural workers to be exempt from Government’s migration target

Defra Secretary Michael Gove has suggested seasonal agricultural workers could be exempt from the Government’s target to reduce net migration to the tens of thousands.

Farmers warned after 70 sheep stolen in series of thefts

Police are urging farmers to be vigilant after dozens of lambs were stolen in a theft near Harrogate.

Farm Safety Week: Dairy farmer speaks out after losing fingers in bottling machine

It’s farm safety week - and dairy farmer Helen Banham has spoken out after losing two fingers in a bottling machine incident.

'They've appointed a yes man' - Kevin Roberts announced as HCC chairman

It follows criticism from the farming sector of the Government’s selection process.
FG Insight and FGInsight.com are trademarks of Briefing Media Ltd.
Farmers Guardian and FarmersGuardian.com are trademarks of Farmers Guardian Ltd, a subsidiary of Briefing Media Ltd.
All material published on FGInsight.com and FarmersGuardian.com is copyrighted © 2016 by Briefing Media Limited. All rights reserved.
RSS news feeds