Decrease in milk prices only adding to struggle

LAST week we were told that our milk price, which has already gone down 3p over the last two months, would be going down a further 6p in December; overall this is over 22%.

- Ro Collingborn

Nearly all of the UK milk buyers are on a similar trajectory. One mozzarella maker has announced a 12p reduction.

Such a reduction in one hit is unprecedented and will mean most dairy farmers will be producing milk at a loss.

There is no ray of light. World production has risen while demand has slowed. Here in the UK, farmers are producing considerably more milk than last year, and the two factors have combined depressing the market.

Alarmingly, in the States, there has been the highest increase in the national dairy herd for the last 25 years, and Trump has his eye on our market place. The use of genetics in the US over the last years has meant that milk quality has increased from its historical low level, and the US is putting more fat and protein into the market. New Zealand, which has a very advantageous trade deal (for New Zealand farmers), is also about to enter our marketplace.

After Brexit, Ireland, which had traditionally placed around 100,000 tonnes of cheese into the UK, took a hit, and imports into the UK went down to 60,000 tonnes. This year Irish imports have been 130,000 tonnes, all of which adversely affect our market.

Our markets are now adversely affected by a decrease in the global cheese market of £1,000 a tonne. Supermarkets, not wanting to be left out, are keen to re-tender with processors at lower prices. There are also fears for the traditional spring flush, where the NFU's new milk contracts, where farmers are no longer tied to one buyer, could work against farmers.