UK milk production continues to run significantly down on last year, according to levy board AHDB Dairy.
Milk processing can be split between products that are produced to meet consumer demand, such as liquid milk, yoghurt and most cheese, and products that are produced to manage additional raw milk volumes. This production led processing will include most milk powders and some cheese.
Assuming milk production remains down on last year, and follows a similar pattern to previous years, there looks to be just enough to cover consumer-led requirements in 2016. However, towards the end of the year, the forecast suggests production could become tight and could easily impact on the consumer-led band.
In order to satisfy consumer-led demand, processors will need to divert milk away from production-led products.
The implication is likely to be spot milk prices exceeding commodity prices, in order to encourage those making production-led stock to sell their milk instead, AHDB Dairy said.
By: TheCattleSite News Desk
Source: The Dairy Site