UK - National Farmers Union (NFU) dairy board chairman Michael Oakes says with the outlook in the dairy sector looking a little brighter, it is critical that dairy farmers see money going back to the farm gate quickly and not stuck in the supply chain.
Following a global supply and demand imbalance that has sent dairy commodity prices – and the price farmers are paid for their milk - plummeting - there is renewed hope that the bottom of the trough has been reached.
Mr Oakes said: “It’s been the longest and deepest crisis anyone in the dairy sector can remember and clearly current farmgate prices are not sustainable. It’s still early days but from what we’re seeing on the futures markets, it’s looking like things could be on the cusp of improving.
“Supply is pulling back across the world and there are reports that dairy consumption will be bigger than the growth in production this year.
"On farm we’ve seen price increases, a few price holds and although no overall change on the last Global Dairy Trade auction, this follows two positive auctions. Some traders are concerned where they will source products for the end of the year so the right signs are there.
“However, we must remain cautious. It’s important to stress that many farmers are receiving a low price for their milk, so despite any small increases, they will still be extremely low. And how quickly we get back to a sustainable level no-one knows – maybe six months or even longer. So there is still a long way to go.”
TheCattleSite News Desk