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When The Market Turns
A discussion document on the immediate prospects for the dairy market
The full copy of this important document can be downloaded from the publications section of this website, alternatively please contact the office on (01902) 851007 and we will be happy to send you a copy in the post.
In recent months there has been considerable change in world and domestic dairy markets and as a result a number of reports have been published by respected dairy industry organisations debating the future of our industry. We believe that these reports make valid points and this discussion document reviews current thinking and updates our previous analysis.
In Summary, we believe that:
- The UK dairy industry is ahead of Euroup in terms of restructuring ans our analysis shows the opportunity to stabilise milk production in the years ahead, if farmers have the confidence to invest and grow their businesses, as the heifers are in the pipeline.
- World stocks levels will be a primary influence on world market prices moving forward. Tracking stock levels will therefore be important as small changes will have a significant impact on price. Better information is required, as already found for most other major agricultural commodities
- Although we face a volatile future, profitability for good dairy farmers will improve in the medium term compared to recent years.
- The current market dynamics will widen profit differentials - the rewards for efficient, flexible businesses will be greater whilst inefficient businesses will be exposed and more likely to fail.
- Trust and confidence throughout the supply chain is vital. Customers must ask themselves what they are doing to build trust and encourage stability, for the benefit of everyone in the supply chain.
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