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Dairy Farmer magazine's August 2015 digital edition

Insights

Don’t miss this month’s new look Dairy Farmer. Take a look at the digital edition today.

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A word from the Editor

By any account the recent Global Dairy Trade auction was an unmitigated disaster for dairy prices with all time lows for most, if not all, commodities.

And more bad news is on the way, as at the moment there seems little chance of curtailing the surplus and flipping the market round from excess to equilibrium.

The trouble is now we are operating on the world stage, we are governed by that scenario and its consequent effect on prices. So what can be done?

Domestically we have already seen the furore round Grahams Dairies’ 7ppl, and whatever the right or wrongs of that particular case, there needs to be a hefty deterrent for unnotified extra production. 

On the EU front, Commissioner Hogan stands firm and apparently chooses not to see the hardship dairy farmers are going through, particularly in the UK where we have a currency whammy as well. He is far from inclined to increase intervention thresholds, which currently would deliver us the princely sum of 12.5ppl.

But in the absence of new outlets or political intervention, the only sure way of turning the market round is to bring global supply into check. 

Now the New Zealanders look as if they are taking that path if their cull numbers are anything to go by, as they realise they cannot make money at the sort of disastrous prices forecast for them.

So will price alone do it, particularly as we start to see autumn feed costs kick in?That extra litre to spread overheads may no longer be the salvation it once was, and the battle looks set to change to one more of cutting back to staunch a growing cash haemorrhage!

Peter Hollinshead, Dairy Farmer editor

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