US - Current milk price cuts are a blow to confidence but the long term dairy markets outlook remains positive, says the British National Farmers Union (NFU).
Long term dairy demand growth will remain at two per cent per year and the market will turn at some point, farmers are being reassured.
This was the Union’s message at the UK Dairy Day in Telford this week after coming under fire from some producers accusing the NFU for misleading them over the direction of the market.
High production across much of the northern hemisphere, the Russian ban and China’s withdrawal from the market led to price cuts this summer.
In response, farmers must be competitive, according to NFU dairy board chairman Rob Harrison.
He told TheDairySite that competition suits no one, whether producers, processors or retailers.
What remains key is never to become too excited or gloomy when the prices are high or low.
He stressed the importance of understanding the need to produce milk at world prices, adding that the UK is now in the top half of Europe’s milk price table.
This follows the SOS Dairy campaign in 2012 back when UK milk was bought for around 2 pence below the EU average.
In terms of quota abolition, he said: “The UK is still not self-sufficient, there is a lot of headroom in the UK for sustainable growth in our market.
He played down the effect of the Russian ban, although he said Arla was sending cheese and butter there, meaning they have responded by powdering more milk.
“Most of our milk is in the fresh sector,” explained Mr Harrison, adding that the market will turn and farmers must adjust to lower prices.
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