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14 January 2014 03:07:42 |Dairy,Finance,News

UK milk production continues to increase


According to the RPA’s Wholesale Milk Production report released on 10th January 2014, December 2013’s UK milk production stood at 1.150 billion litres, an increase of 83.8 million litres (+8%) on last month and 111.5 million more than was produced in December 2012.
In fact according to the RPA’s records, this is the highest level of milk production the UK has had for a December since the 1994/95 milk year, when we were regularly reaching our national quota and milk quota levies were common.

The Milk Production report shows that cumulative production for the first 9 months of the quota year now stands at 10.151 billion litres, which is an increase of 3.3% on last year’s production (325.8 million) with a butterfat average of 4.00%.
If production continues to increase month on month over the next three months, the UK as a whole could be coming a lot closer to hitting it’s national production quota limit than may be comfortable for those producers who have been regularly producing over their quota (or without any at all) over the last few years.
As we have not reached our national quota level since 2003/04, Milk Purchasers have for some time now not always insisted their producers hold enough quota to cover their production, and have been happy to pay for collections over and above quota held. However as the chance of a levy becomes more of a possibility, this approach may change, and milk producers who have not felt the need to ensure they have quota to cover production may wish to reconsider this decision.
The UK can still be subject to a levy if nationally it goes over quota, up until the end of the 2015 milk year when milk quotas are phased out.

Milk Quota is now trading at around 0.2ppl for unused 4.00% butterfat quota, however this may rise if demand increases from producers wishing to gain peace of mind by having enough quota to cover their production, as insurance against the possibility of a levy.
Dairy UK said that 2014 will be a year during which it is vital the dairy industry stands up for itself and demonstrates ‘dairy makes a difference’.
Speaking at the Semex Conference in Glasgow, Dr Judith Bryans, chief executive of Dairy UK, said: “Dairy has so much to be proud of and there is a need for the contribution of dairy products and the industry itself to be recognised and valued more widely.
“Government and decision-makers at all levels are assailed by those pursuing an anti-dairy agenda.
“It is up to us to remind, politicians, civil servants, health professionals and the public that dairy makes a difference in a very positive way.
“It is essential that the industry has to stand up for itself and work in a constructive and collaborative manner. It’s never been more important to do that.
Dairy UK will urge politicians, health professionals, industry partners and the public to support the industry and will run a series of events and initiatives throughout the year.
Dr Bryans said: “The promotion and defence of dairy is at the heart of our organisation’s activities and we intend to work vigorously to extol the virtues of a great British industry which makes great British products.”

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