ao link
Farmers Guardian
News
Over The Farm Gate

Over The Farm Gate

This Is Agriculture - Sponsored

This Is Agriculture - Sponsored

DataHub

DataHub

Auction Finder

Auction Finder

LAMMA 2021

LAMMA 2021

Dairy Farmer magazine's July 2019 digital edition

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

TwitterFacebook

A word from the Editor

Producers will be breathing a collectivesigh of relief that spring prices held up better than likely when the country was awash with milk.

This, of course, was partly due to the happenstance of the steadying hand of Arla, which, reflecting its trans-European base, managed to set a UK benchmark for others to emulate.

But where do we go from here? Well, it’s virtually anyone’s guess as markets not only have to respond to prevailing supply and demand, but to that new determinant of price which is the outcome of the Brexit negotiations.

These have taken on a more worrying hue lately as forerunner Boris Johnson vows to leave with or without a deal come October 31, and with many currently rallying to his colours, some maybe to prevent a Tory implosion or others maybe with an eye to their future, he is odds-on favourite with the bookies.

Holding firm

For the moment at least, Arla continues to hold firm at a healthy 29ppl on a standard litre, with many still getting more than 30ppl. But there is talk that some producers are only on 25ppl, meaning the gap is now 4ppl between the lowest and the highest non-aligned price, and more than 6ppl between the lowest price and those lucky enough to be on a retail contract.

Effectively, that means we have escalated to a four-tier market, namely those on retail contracts, those supplying Arla, those supplying cheesemakers, and those in the worst position of all supplying liquid processors.

The question is which will be Brexit beneficiaries and which casualties? The aligned groups should be okay, but will the Arla effect be snuffed out by Brexit? And whereas the cheesemakers have performed well in recent months, their fortunes will be far more exposed to the Brexit maelstrom than any other sector through tariff differentials.

But liquid processors will be okay? Well, you would think so given that most of their output is destined for domestic consumption, but processors are getting hammered by retail pressures making them more reliant on butter and cream prices, which is an EU market where exchange rates come into play.

All in all, it looks set to be a whole new ball game post-Brexit!

TwitterFacebook
Post a Comment
To see comments and join in the conversation please log in.

Most Recent

Facebook
Twitter
RSS
Facebook
Twitter
RSS