NEWS

Bleak dairy forecast
By Steven Moore

The improving situation for the hard-pressed dairy sector could all turn sour again within months, farmers have been warned.
Mike Johnston, chief executive of the Dairy Council but speaking on behalf of Dairy UK, told the Stormont Agriculture Committee that a number of factors had come together to produce rising returns - but others could come into play to dampen prices again.
He said commodity markets for milk powder, butter and cheese had tighten over the past three months as there was less produce available due to falling milk production.
The major build up in intervention stocks in America and the EU was also having a significant affect, he said.
The wet weather, a reduction in the feeding of concentrates to cut costs and the aggressive culling of cows had resulted in milk production in Northern Ireland being around 12 per cent below this time last year, he said.
"Many local milk buyers are seeking to buy more milk from United to offset the shortfall in their own supply, and with United itself having less milk, processors are having to fiercely compete for the available supply," he told MLAs.
Milk production would fall back even further in EU countries in the coming months, he said.
However, he warned that rising prices could stimulate others to enter the market while the turn of the year will see an increase again in Northern Ireland milk production.
"There is the real risk that improving returns will stimulate milk supply, especially in Oceania and Latin America," Mr Johnston said.
"Once the EU milk supply starts to increase from December onwards, there could be a sharp correction in prices unless the underlying demand for dairy products improves."

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October 2nd 2009
September 25th 2009