No milk for excess products in 2016

Published 11 August 16

UK milk production continues to run significantly down on last year. As a result, AHDB looks at how the industry will cope with the rapid reduction in volume and what will be available for production.

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.

Excess milk graph 11.08.16

The graph shows how much milk was used to fulfil consumer-led and production-led demand last year, as well as forecasted 2016 milk production and the difference between the two.

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.