Dairy industry unlikely to begin recovery until end of 2015

DAIRY commodity markets may not see a reversal in fortunes until this time next year, experts have said.
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At a Promar press briefing in London last Thursday, Tim Harper, senior consultant at Promar, said the consensus within parts of the industry was the dairy sector would not return to an upward trend until the end of 2015.
Dairy farmers have seen returns fall in recent months, with the impact of the Russian ban on Western products and slowing global dairy demand hitting UK processors.
“We are not expecting dairy commodity markets to return to an upward trend until this time next year and that is if the Russian ban is lifted,” Mr Harper said.
“But this could be followed by a period of rapid increase [in commodity prices].”
Promar consultants at the briefing also underlined claims made in recent weeks the industry needed to learn to deal with periods of price volatility.
“We saw a huge climb in prices from May 2012 to August 2013 and the price is now lower than it was in May 2012,” Mr Harper said.
“Over here we perhaps need to move to a situation where the market will increase and decrease more frequently and our businesses will adapt to it.
“Farmers will have to focus on what their milk buyers’ requirements are and make sure they have got what is required.”
The briefing heard there was currently a ‘disconnect’ between farmgate returns and retail milk prices as UK retailers continued to drive down milk prices.
Promar claimed milk was often sold at £1 for four pints which was equal to 42.7ppl.
Mr Harper said: “If I look at the difference between 42.7ppl and some of the prices of retail-aligned contracts, it would be impossible for there to be any margin left.
“Retailers are happy to accept it is a difficult situation, but are marketing it in a way which does not cover the costs.”
 
Source: Farmers Guardian

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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