31st January 2012
Prices at this month’s United Dairy Farmers’ milk auction edged down by about a third of a penny on last month’s auction to 28.15 pence per litre.
“This was as good as could be expected in current market circumstances,” said David Dobbin the United Group Chief Executive. “With weakening markets, a strengthening pound and increasing milk supplies we expected lower prices; but good demand from processors helped keep the auction on the right side of 28 pence per litre for the 44 million litres of milk sold.”“Market returns have eased in the past month with EU markets under pressure from lower prices on international commodity markets, especially for butter, and a further weakening in the Euro exchange rate. Since October the Pound has risen by 6 Euro cents to around £1 = 1.20 Euro, equivalent to about 1.5 pence per litre of milk.”
“A year ago very strong demand from China and Russia and drought in Australia and New Zealand drove markets higher and give an unexpected boost to milk prices in the first quarter of 2011. It is looking increasingly unlikely that those circumstances will be repeated this year, with a general weakness in the world economy and a continued surge in milk supplies from New Zealand and Argentina.”
Milk supplies in Northern Ireland are now rising seasonally and as a result we would expect to see the normal easing in auction prices as we approach peak output. Much will depend on global demand being sufficient to clear product stocks from the southern hemisphere before the spring surge in the EU production,” said David.
In this month’s auction 44 million litres of milk were sold for February delivery at an average price of 28.15 pence per litre, compared to an average price of 28.51 pence in last month’s auction, and 29.16 pence in the January auction last year.
23rd December 2011
The first milk sold for 2012 at the last auction of 2011 saw prices average 28.51 pence per litre for 46 million litres of milk sold for delivery in January 2012.
“This is a good start to the 2012 year with prices 1.5 pence per litre better than at the same time last year,” explained David Dobbin, the United Group Chief Executive. “With the milk volumes for sale now starting to climb as we approach spring we normally see prices ease back; this month’s auction result sets a reasonable starting point for the year ahead,” said David.“The price in this month’s auction was half a penny down on last month, which was not unexpected given the sharp fall in the value of the Euro, and the higher volumes of milk now available for sale,” said David.
“The Pound is now at its highest level against the Euro for a year and this week it broke through the psychological £1 to €1.20 barrier. Since October the Pound has risen by 6 Euro cents, equivalent to about 1.5 pence per litre of milk.”“Global milk supplies are surging, particularly in New Zealand, where supplies were 11% ahead of last year in October. Dairy markets are finely poised, the big question is whether Southern Hemisphere countries will sell out their 2011/12 output before the EU and US production ramps up in the spring.”
“A year ago we were in a similar position, but strong demand at the start of 2011from China and Russia helped clear available stock and prices firmed. Current demand is steady and we wait to see if the Southern Hemisphere clears. As we go into the New Year, the medium term forecast is generally positive.”
In this month’s auction 46 million litres of milk were sold for January delivery at an average price of 28.51 pence per litre, compared to an average price of 29.02 pence for the 43 million litres sold in last month’s auction, and 26.98 pence in the December auction last year.
23rd December 2011
This month’s United Dairy Farmers milk auction saw prices of just above 29.5 pence per litre, the fourth successive month around this price.
“A fourth month of continued higher prices will be welcome news for United members,” commented David Dobbin, the United Group Chief Executive, “with the fall in local milk supplies encouraging demand and helping offset the impact of weaker returns from international markets.”
“This month’s auction was the smallest of the year. We sold 37 million litres of milk for November delivery – and the average price of 29.55 pence per litre was just fractionally ahead of last month and half a penny ahead of the same month last year.”“The recent stability in auction prices has been helped by the recent price increases for farm gate milk in GB. The large gap between NI and GB farm gate milk prices has now been closed with GB prices having risen by about 3 to 4 pence per litre. Average GB milk prices are now just behind those currently being paid by United. These GB price increases are helping to underpin the market for consumer products, especially for cheese where returns have been stable and are now ahead of the returns available from international commodity markets.
“In recent months rising international milk supplies have had a depressing effect on commodity markets, with new season supplies in New Zealand 10 to 15 % ahead of last year and increases of over 2% in both the US and EU. Butter and wholemilk powder returns from global markets are well behind internal EU prices, and are likely to pull EU prices lower in the months ahead.
However, after 6 months of steadily falling prices, the latest Fonterra auction recorded a 5.7% lift in the price for wholemilk powder – perhaps indicating that the growth in New Zealand supplies can be absorbed by international markets and a realisation that quota constraints will limit EU milk supplies in the months ahead,” concluded David Dobbin
In this month’s auction 37 million litres of milk were sold for November delivery at an average price of 29.55 pence per litre, compared to an average price of 29.50 pence for the 39 million litres sold in last month’s auction, and 29.00 pence in the October auction last year.
25th November 2011
Milk auction averages 29 ppl
Prices eased a little at this month’s United Dairy Farmers milk auction, but still averaged over 29 pence per litre for the fifth successive month.
“This was another good auction for United members taking into account the higher volumes of milk for sale and the weakening returns in international markets,” said David Dobbin, the United Group Chief Executive. “There were 6 million litres more milk for sale with milk supplies increasing as we move out of the trough period. United’s milk supplies are now running 4% ahead of last year. The impact of falling bulk butter and powder prices and adverse currency movements on the auction price were thankfully offset by good returns from consumer markets in the UK, especially cheese. The auction averaged 29.02 pence per litre, which was 0.53 pence down on last month’s average, but 2.25 pence ahead of the same month last year.”
“United’s milk supplies were at their low point for 2011 in the third week in October, two weeks earlier than last year. Supplies are now starting to climb as we go into the winter and are also ahead of last year’s levels. As a result we sold 43 million litres of milk in this month’s auction, up from 37 million litres last month.”“International market demand, particularly from China and Russia has fallen in the second half of 2011, and at the same time we are seeing strong production from New Zealand, Australia and the US.”
“Even with the improvement in last week’s Fonterra auction, Fonterra prices for butter and wholemilk powder were 44% and 23% respectively below the peak levels achieved in the spring of this year and continue to be well behind the returns available from European markets. As a result the EU market is now a target for New Zealand product, and that is leading to weaker prices, especially for butter.”
“Markets are generally subdued as buyers wait to see if prices will weaken further and it is expected things will remain quiet in the run up to Christmas. With the seasonal rise in European milk supplies in the New Year an upturn in global demand will be needed to avoid a build up of stocks and increased downward pressure on markets,” concluded David.
In this month’s auction 43 million litres of milk were sold for December delivery at an average price of 29.02 pence per litre, compared to an average price of 29.55 pence for the 37 million litres sold in last month’s auction, and 26.77 pence in the November auction last year.
26th September 2011
Prices remained stable at this month’s United Dairy Farmers milk auction, averaging 29.50 pence per litre – the third successive month at this level.
“A welcome result for United members, this was our highest ever September auction return and almost 4 pence per litre above the same time last year. The seasonal fall in milk supplies helped keep prices at this month’s auction stable despite falling Fonterra auction returns and recent market uncertainty,” explained David Dobbin, the United Group Chief Executive.
“Local milk supplies are at their seasonal low in October and November and this kept demand strong for the 39 million litres of milk we sold in the auction. An increased proportion of that milk will go into cheese production, where returns are now ahead of those available from powder or butter and, going forward, will be supported by the recent milk prices increases in GB.”
“But the general economic uncertainty in Europe and elsewhere is having an impact on dairy markets, with demand weakening in the EU and US as consumers seek to curtail spending, making more product available for sale on the world market.
“International market returns are easing and are generally below those available on EU markets. All eyes are now on the Southern hemisphere, especially New Zealand, as their milk production gets into full swing. To avoid further falls in international powder returns we need to see the growth in milk supply remain low and we need continued strong demand, particularly from China, Russia and North Africa through the coming winter.
In this month’s auction 39 million litres of milk were sold for October delivery at an average price of 29.50 pence per litre, compared to an average price of 29.53 pence for the 40 million litres sold in last month’s auction, and 25.8 pence in the September auction last year.