October 13, 2011
UK's milk price up
According to figures from Dodd & Co., the average milk price rose by GBP0.0115 (US$0.02) per litre in the 12 months to March, amouting GBP0.2512 (US$0.40) per litre.
The statistics came from Dodd & Co's annual dairy report, and reflected an overall improvement for the region's dairy farms.
The company, which has 700-plus farming clients in Northern England and Scotland, used data from 54 specialist dairy farms in the region to draw up the report.
Dodd & Co farming manager Andrew Sims said that the industry remains very challenging. However, margins are very tight.
He said they have yet to see milk prices reach the levels seen in 2009, where average prices received in the survey reached GBP0.2661 (US$0.42) per litre. As a result, the average farmer in the region has generated a surplus of less than GBP 0.001 (US$.002) per litre after total costs of production.
He said that the value of the Single Farm Payment was being reduced because of increased modulation and further movement to area-based payments.
"On average, the single farm payment accounts for 7.27% of farm gross output. Without this payment the average farm in the region would be running at a deficit of GBP0.0129 (US$0.02) per litre after drawings and tax," said Sims. Dodd & Co expects this level of support to drop even further because of the Common Agricultural Policy reform, which is forecast to result in lower subsidy payments and a cap on large claims.
The survey again showed a "significant disparity" in gross output between dairy farmers north and south of the Border.
Scottish farmers received higher milk prices and also received almost double the single farm payment of their English counterparts.
However, despite generating a gross output GBP 0.042 (US$0.07) per litre higher than those in England, Scottish farm surpluses after drawings and tax ended up being only GBP0.0105 (US$0.02) per litre higher.