State of the market - UK dairy supply

UK milk supply in 07/08 was the lowest in 30 years – and estimations suggest that,
despite the higher milk prices received during 2008, this trend is set to continue. A new
report issued on 30 January 2009 by DairyCo gives an insight into why UK milk supply is
still falling.

This continued decline in milk supply could lead to a knock-on effect with processors
reluctant to invest in what they feel is a contracting industry. This would ultimately
disadvantage British dairy farmers.

Factors affecting milk supply looks at the numerous issues that have affected both cow
numbers and yield, the two factors that govern milk supply, both in the past and their
predicted future effect – including the influence of TB, genetics, breeding, fertility, cull
cow prices, forage quality and weather.

In particular, the document highlights the many factors which have acted to reduce dairy
farmer confidence and an individual farmer’s ability and willingness to invest in and
develop their business, a key negative influence on milk supply.

Dairy farmer confidence increased in 2008, as a result of rising milk prices. However,
DairyCo analysis suggested this increase in confidence was extremely fragile and with
falls in farmgate price already announced for 2009, with the likelihood of more to come,
this increased confidence will very quickly disappear.


Read the rest of the article here: http://www.mdc.org.uk