25th February 2010
Prices at this month’s United Dairy Farmers’ milk auction were better than many expected with the lots averaging at 23.32 pence per litre, which was only 0.7 ppl down on last month.
Commenting on the auction, David Dobbin United’s Group Chief Executive, said:
“This was our highest February auction price for over a decade. After last month’s fall of 3.7 ppl we know that farmers were concerned about the prospects for this month’s auction, especially when we had more milk for sale as we move toward the Spring peak in milk supplies. In the circumstances an average price of 23.32 pence per litre was a good outcome especially when processors are also now directly paying for 75% of the quality bonuses.”
“There is no doubt that the auction result was helped by the fall in the value of Sterling in recent weeks against the Dollar and also by the continued fall in local milk supplies. Milk supplies in Northern Ireland are running about 7% behind last year, while the latest figures for the Republic put their reduction at almost 10. This has been largely blamed on the poor weather last summer, but the recently published results of December 2009 farm census also confirm that the total number of dairy cows in Northern Ireland has fallen by 4 in the past year.”
“Over the next few months much will depend on whether the EU can get through 2010 without significant use of intervention, which would inevitably drive prices lower over the peak supply period. Last year over 300,000 tonnes of product were sold into intervention. Commentators are suggesting that the use of intervention is likely to be much lower this year with improved international demand and reduced milk supplies in Australia, New Zealand, the US and certain EU countries,” concluded David
In this month’s auction almost 46 million litres of milk were sold at an average price of 23.32 pence per litre, compared to an average price of 24.05 pence at last month’s auction and 17.82 pence in the February auction last year.
21st January 2010
As expected milk prices fell at this week’s United auction due to the withdrawal of EU export refunds and the recent weakening in dairy markets. The average price of milk sold in the auction was 24.05 pence per litre which was 3.7 pence down on the previous auction but 5.5 pence ahead of the same auction last year.
“This month’s auction price was an accurate indicator of what is happening in dairy markets right now and in particular the impact of the EU Commission’s decision to withdraw all EU export refunds. Prices have also been adversely affected by the recent weakening in international dairy markets and the strengthening of sterling versus the US dollar and Euro which has further depressed local returns,” said David Dobbin, the United Group Chief Executive.
“For the past few months our auctions have been generating exceptional prices driven not just by improved markets but also by a shortage of milk supplies. With milk supplies now rising seasonally as we move toward the spring and the last of the EU export refunds being used up, those prices could not be sustained. However the average price of 24.05 pence at this month’s auction was still the highest January auction price for over 10 years.”
“Although the EU stopped granting export refunds in November, the final refunds issued are only now used up and we are seeing the full effect of the loss of refunds that were worth close to 4 pence per litre a few months ago.
“Since the beginning of the new year dairy markets have been very slow to pick up after the Christmas holiday period with buyers holding back waiting to see whether markets will slip back as we approach the EU spring peak. Prices at the Fonterra milk powder auction fell by 7% at the start of this month. EU powder and butter prices have also fallen back, while cheese prices have remained stable. As usual when markets start to weaken, buyers are more reluctant to commit to forward purchases.”
“However the situation is better than a year ago. Milk prices are over 5 pence ahead of last year, global markets are considerably firmer and milk output in some major supply countries is down on 2009 levels. Meanwhile demand is recovering as developing countries move out of recession and a recurrence of melamine contamination has boosted Chinese demand for imported milk powder. Going forward much depends on the EU Commission delivering on their commitment to dispose of their massive intervention stocks of butter and powder in a manner that causes minimum disruption to the market.”
In this month’s auction 38 million litres of milk were sold at an average price of 24.05 pence per litre, compared to an average price of 27.72 pence at last month’s auction and 18.50 pence in the January auction last year.
23rd December 2009
Leading NI dairy business, Dale Farm, has scored an impressive hat-trick in the environmental arena with all three of its NI production sites now awarded ISO 14001 accreditation.
Dale Farm had already secured the internationally recognized ISO 14001 standard at its Dunmanbridge plant near Cookstown where it makes Dromona cheese and at its Dromona Creamery near Cullybackey which churns butter and spreads products. The same feat has now been achieved by its Pennybridge Dairy at Ballymena, where the company produces Dale Farm fresh milk and cream products.
The achievement reinforces the company’s strong environmental credentials, building on its success at the 2009 NI Environment Agency Sustainable Ireland Awards where Dale Farm won the Energy Efficiency Award. The company also gained ‘Quintile One’ status in the latest NI Arena Network Environment Benchmarking survey.
“We are delighted that all three of our NI manufacturing sites have now achieved accreditation to the ISO 14001 standard,” said Mike Mullan, Dale Farm HR and Business Improvement Director. “The ISO standard provides a framework to manage each site’s environmental performance in areas such as energy, water and waste reduction.
“The accreditation process requires a long term commitment to environmental management and improvement, and this has not only improved our use of natural resources, but also helped us to reduce costs and increase our competitiveness,” concluded Mike.
22nd December 2009
The recent run of firm prices continued in final United Dairy Farmers’ milk auction of 2009, with an average price of 27.72 pence per litre. Although this was 0.8 pence down on last month’s auction it was the third highest auction price of 2009 and continues to reflect the relative strength of international dairy markets.
“A slight weakening in prices was expected at this month’s auction as export refunds are largely now used up and milk availability has increased,” said David Dobbin, the United Group Chief Executive.
“Prices at the last 2 auctions were well ahead of market realisations and were driven by a shortage of milk supplies locally, and also in the Republic. With supplies starting to rise as we go into 2010, and the industry now seeing the full impact of the EU decision to remove all export refunds, it was inevitable that the auction would begin to align itself more closely to the returns available from international markets.
“In the auction we sold 40 million litres of milk, making it the largest auction since last summer. We received an average of 27.72 ppl, which is still a very good price – and about 11 pence ahead of the equivalent auction last year.
“While no two years are the same, the experience from 2009 is that farmers are likely to get a better return for their milk in the autumn/winter, when there is greater demand for the available milk. Those advocating a spring calving policy should also recognise that commodity markets will not provide a sustainable return if the EU continues its policy of reducing support and retreating from world markets. An all year round supply with a flatter monthly profile is key to the Northern Ireland dairy industry moving into more added value consumer markets where demand is greater in the winter than the summer.”
“The pre-Christmas period is traditionally quiet in dairy markets and the lull in trade makes it more difficult to asses the mood of the market. However 2009 has ended with milk output lower than expected in Australia, New Zealand the US and some EU countries; while demand has improved as the world economy recovers and China moves away from its melamine crisis. The market has also benefited by the EU decision to delay the release of its massive butter and powder stocks until mid 2010.”
“So, while prices will weaken as EU milk supplies rise toward the Spring peak, the prospects are better than they were 12 months ago,” concluded David Dobbin.In this month’s auction 40 million litres of milk were sold at an average price of 27.72 pence per litre, compared to an average price of 28.52 pence per litre for the 38 million litres sold at last month’s auction.
27th November 2009
For the second successive month the United Dairy Farmers’ milk auction has averaged over 28 pence per litre. Despite underlying dairy market returns weakening since the previous auction, prices at this week’s auction were boosted by a continued reduction in local milk supplies.
“Following the recent removal of all dairy export refunds, EU markets have started to weaken and this month’s auction result was better than many expected,” said David Dobbin, the United Chief Executive.
“The average price was 28.52 pence per litre, which was almost a quarter of a penny ahead of last month. Coming at the end of a very difficult year, the last two auctions have been a welcome and much needed boost for farmers.
“There is no doubt that the strong auction price was driven by the low level of milk supplies, both here in Northern Ireland and also in the Republic,” explained David. “Milk supplies are always low during the final quarter of the year, but having recovered in October local production has fallen back and is now running over 10% behind last year’s levels.
“We saw a slight recovery during the brief spell of improved weather in September, but that was short lived and we are now seeing the knock-on effects of the poor weather earlier this year. Silage quality is variable; cows are not in as good condition as normal; infertility appears to be an issue on many dairy farms; and, on top of that, this weeks floods have made it impossible to collect milk from some farms.
“Processors are finding it difficult to get all the milk they need to meet their requirements and strong demand has pushed our auction prices above the levels that would be justified by current returns from commodity markets.
“International markets remain relatively firm, with weather also affecting milk production in New Zealand and Australia, and renewed demand for dairy products from China. The Fonterra powder auction at the start of this month saw a 14% lift in prices, but in milk equivalent terms the average price of $3437 per tonne was well below our latest auction prices.
“Since then the EU Commission has removed all export refunds on dairy products. The refunds had been worth almost 4 pence per litre and as a result EU markets seem to have peaked and are now starting to soften,” concluded David Dobbin.
In this month’s auction 38 million litres of milk were sold at an average price of 28.52 pence per litre, compared to an average price of 28.29 pence per litre for the 35 million litres sold at last month’s auction.