NFU Scotland hosted its first milk monitors' conference in Paisley this week, in what will now become an annual event to discuss the current dairy market situation as well as future projections for the industry.

 

Milk monitors are grass roots dairy farmers who represent their local Union branch on dairy matters. The conference gathered together around 40 monitors to hear from guest speakers, Patty Clayton of DairyCo and Ash Amirahmadi of Arla. The speakers provided a detailed insight into the cause and effect of market volatility and ventured predictions on trends for 2015 and beyond.

They explained that an extra 8bn litres of milk on the global market is competing for a smaller share since the Russian import ban and the significant drop in the Chinese market due to the stockpiling of powders in 2013. With Russia and China now representing a 28% share of traded world dairy produce, this has a significant impact on the global market.

The knock-on effect of extra production and a smaller market puts UK producers in a challenging position - facing an average 12% drop in milk price since the start of the year. Unfortunately, this price decline is set to continue during the first half of 2015 as a drop in cheese contracts, down 13.1%, now joins the decrease in contracts for manufacturing and non-aligned liquid milk. These have seen drops of 23% and 19.7% respectively this year.

In addition, there is likely to be more powder in European stocks which will impact on price recovery. Despite countries such as Ireland, Germany and the Netherlands operating super-levy until April 2015, production is unlikely to slacken significantly and the lower feed costs followed by the spring flush is likely to see a production increase, particularly when quota is removed.

Market round-up

Messrs Craig Wilson Ltd sold 63 store heifers at Ayr on Thursday to a top of 237.7p per kg and an average of 215.6p, while 83 store, beef-bred bullocks peaked at 251.8p and levelled at 222.3p. Twenty store, B&W bullocks sold to 148.2p and averaged 144.7p.

The Cumberland and Dumfriesshire Farmers Mart had another great show of 7191 prime lambs forward at their weekly sale in Longtown on Thursday that sold to a top of £127 per head and 265p per kg to average 182.9p (-2.4p on the week).

There was also a larger show of 5958 cast sheep forward when heavy ewes sold to £166 for a Texel and averaged £93.62 (+85p), while light ewes peaked at a massive £95 for an excellent pen of 40 Blackfaces and levelled at £60.97 (+£1.97). Rams sold to £170 for a Texel and averaged £95.77 (-£8.68).