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UK Dairy Market Overview - January 2024

Source: The DairyNews
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In the UK's January 2024 Dairy Market Review, milk deliveries experienced a decline of 7.6 million litres, representing a -0.7% drop compared to the same period last year. Although the rate of decline intensified from December, it remains lower than the approximately 3% declines observed in the Autumn.
UK Dairy Market Overview - January 2024
The cumulative production for the current milk season (April to January) reached 10,296 million litres, trailing by a marginal -0.5% compared to the corresponding point in 2023. This figure is slightly below the latest forecast revision and is expected to be reevaluated in March ahead of the flush.

Globally, milk deliveries averaged 809.3 million litres per day in November, reflecting a year-on-year decline of 1.7%. With all regions except Australia reporting volume decline, the European Union saw a 3.0% decrease in milk deliveries.

The EU's decline was primarily driven by production decreases in France, Germany, and Ireland, where adverse weather conditions affected volumes, especially in Ireland with its significant reliance on grass-based systems.

Forecasts for 2024 anticipate a modest 0.25% increase in global milk production, with variations expected across key regions, including growth in the USA, EU, and Australia but decline in the UK, Argentina, and New Zealand.

In the wholesale markets, January witnessed some uncertainty, halting the steady growth seen through the Autumn. While mild cheddar and butter recorded slight price gains, SMP and bulk cream experienced modest drop-offs. The market tone has shifted to a "wait and see" approach ahead of the Spring flush.

On the farmgate front, the latest published farmgate price for December averaged 37.8ppl. February saw positive announcements, with processors generally increasing or maintaining their pricing. Retail-aligned contracts, including Tesco and Sainsbury’s, witnessed increases, while non-aligned liquid contracts remained stable.

Cheese and manufacturing contracts showed a mix of holds and increases, with Arla Direct leading with a 2.52ppl uplift. Despite a 10% year-on-year reduction in agricultural inputs, input costs remain significantly above pre-Covid levels, impacting farm margins, compounded by the Bank of England's Bank Rate holding at 5.25% since July 2023, its highest level in 15 years. Compound feed costs have stabilized, fertilizer prices are down 50% since September 2022, and energy costs have fallen by 17%.
Jon Patterson
Jon Patterson
Owner of Patterson Farms in Cayuga County and director of the Northeast Dairy Producers Association.
Central New York was chosen to host the North American Manure Expo in July 2024. What does that have to do with the Finger Lakes? Everything. Our farmers were identified as industry leaders in sustainability. It is a testament to the environmental stewardship efforts implemented on farms across our region and state.
Ching Yee Lin
Ching Yee Lin
copywriter who focuses on the historical and contemporary issues concerning the Singapore society
Have you ever been told growing up that drinking milk is good for you? Let’s see if the beverage is actually good for you.
April 2024
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