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Tackling Future Projections for the Scottish Dairy Industry

24 December 2014

SCOTLAND, UK - The National Farmers Union Scotland has hosted the first milk monitors conference, in what will now be an annual event to discuss the current dairy market situation as well as future projections for the industry.

Milk monitors are grass roots dairy farmers who represent their local Union branch on dairy matters.

The event held in Renfrew on 17 December, gathered together around 40 milk monitor farmers to hear from guest speakers, Patty Clayton of DairyCo and Ash Amirahmadi of Arla. The speakers provided a detailed insight into the cause and effect of market volatility and ventured predictions on trends for 2015 and beyond.

They explained that an extra eight billion litres of milk on the global market is competing for a smaller share since the Russian import ban and the significant drop in the Chinese market due to the stockpiling of powders in 2013. With Russia and China now representing a 28 per cent share of traded world dairy produce, this has a significant impact on the global market.

The knock on effect of extra production and a smaller market puts UK producers in a challenging position; facing an average 12 per cent drop in milk price since the start of the year.

Unfortunately, this price decline is set to continue during the first half of 2015 as a drop in cheese contracts, down 13.1 per cent, now joins the decrease in contracts for manufacturing and non-aligned liquid milk. These have seen drops of 23 per cent and 19.7 per cent respectively this year.

In addition, there is likely to be more powder in European stocks which will impact on price recovery. Despite countries such as Ireland, Germany and the Netherlands operating super-levy until April 2015, production is unlikely to slacken significantly and the lower feed costs followed by the spring flush is likely to see a production increase, particularly when quota is removed.

This event followed a meeting, held on 1 December, with representatives from the rest of the UK’s farming unions to tackle the current crisis in the dairy sector. A week ago, the Union met with producer group representatives in Scotland to discuss producer representation.

Gary Mitchell, NFU Scotland’s Milk Committee Chairman commented: “Yesterday’s meeting set the platform for events of this nature going forward. We hope to turn this into an annual conference to encourage milk monitors to attend and discuss key issues and learn more about our industry, not just within Scotland or the UK but globally.

“I was encouraged by the good turnout especially from more remote milk fields Kintyre and I feel we have a real opportunity to make our milk monitors more effective in each of our regions and improve communications with our members in explaining situations like what's happening currently.

“The Scottish Dairy Hub will be a key tool going forward in helping to plan our businesses for the future. This is a free service which dairy farmers can make use of, so I would urge those who are seeking answers to their questions – no matter how simple or complex – to make use of the hub.”


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