DairyCo

Views were taken for the period 1 April through to 26 April.

Indications from the market suggest that prices continue to remain under pressure at the start of the 2012/13 milk year.

Provisional RPA milk production figures for March stood at 1,221m litres, an increase of 54m litres compared with March last year.  If this figure is confirmed, it would be the highest March figure since 2002.  Latest auction prices from United Dairy Farmers were 21.81ppl, a fall of almost 4ppl compared to the same auction last year.

There has been further pressure in butter markets with a £200/tonne decrease between March and April.  Supply and demand imbalances are continuing with some discussion as to whether intervention is now needed to cure apparent over-supply in the market.  On a positive note, there are reports of deals being done for butter through Private Storage Aid.  Cream prices have fallen further in April compared with March and are now at their lowest since April 2009.  However, comments from the market suggest that while the start of April (particularly at Easter) saw prices begin at lower levels than reported, there has been upward movement in prices towards the end of the month.

Milk powder prices have also eased slightly although there appears more confidence in this market compared to markets for fat.  Markets for whey and lactose are also reported to be doing well with supply being a limiting factor.

Finally, Cheddar prices continue to maintain at previous price levels although there is potential pressure from imported product.  In addition, there is concern that with pressure also being exerted in fresh curd markets and the continuing declines in butter; cheese markets may come under further pressure. Figures from Defra show that cheese production in February 2012 stood at 30,000 tonnes, 650 tonnes (2.2%) higher than the previous year. On a cumulative basis, cheese production for the 12 months ending February 2012 reached 387,560 tonnes, up 2.5% (9,400 tonnes) on the previous 12 month period.