21 Aug 2018
'There is no need for panic yet' - Dairy markets reach 'peak'
Clouds are darkening over the dairy markets, but there is no need to panic about farmgate prices just yet.
Alex Black
That was the message from dairy analyst Chris Walkland as he said the markets had peaked, but added it was difficult to predict what would happen when intervention stopped at the end of October.
“Manufacturers may decide not to make skimmed milk powder at all. In which case, supply of butter will also fall. That may change the balance of things,” he said.
Cheese
“Or manufacturers may say we are going to make more cheese which may reduce prices.”
He said there was already an indication of cheese prices falling.
Mr Walkland added butter had come off its biggest highs and the exchange rate had also affected it.
“Currency has knocked £200 to £250 off, but it is still at a really high level.”
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Mr Walkland did not expect farmgate prices to be affected in the short-term, but said there could be changes after Christmas as demand dropped alongside rising volumes.
“I would not expect them to be affected yet,” he added.
“There are darkening clouds on the horizon. We have to be aware. But there is enough margin for farmgate prices.”
Last week, Arla announced an increase for October and Meadow Foods has announced an increase for November.
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