Why milk suppliers are living on a knife-edge

02-Apr-2013 - Last updated on 03-Apr-2013 at 13:55 GMT

Related tags Cheese

Milk supplies are on 'a knife edge', said Richard Clothier

Milk supplies are on a “knife-edge” and the next four weeks will be critical for manufacturers – with a sustained period of heavy rain likely to see prices soar, says the md of cheesemaker Wyke Farms.

Richard Clothier said milk prices were currently stable at around 30p a litre which according to the Department for Environment, Food and Rural Affairs (DEFRA) is 1.03p up year-on-year.

However, he told Food Manufacture this could rapidly fluctuate depending on the weather throughout this month.

Depends on how spring pans out

“At the moment milk prices seem more stable but it just depends on how the spring pans out,” he said. “If the weather stays as it has been then the milk will come early and there'll be lots of it and the price will stay fairly stable.

“If we suddenly get a lot of rain – say another four weeks of it now – then the milk price will go up and it will go up a lot I think.”

Clothier, whose Wyke Farms cheddar brand is the third largest in the UK, said the industry still hadn’t got used to the fact that there were no butter mountains or milk lakes in the EU – a situation that meant supply and prices constantly remained on a knife-edge.

“It’s not like it used to be when there were stocks all around the EU,” he said. “None of that is there any more and I don’t think our industry has ever got used to the fact that there isn’t a buffer of product to draw on there when it is needed.

Knife-edge

“The danger is that if we do get a late Spring then I think supply could be really, really short. As it is, though, it is on a knife-edge. At the moment it looks OK because the grass is growing well and there are plenty of cows on the land early. The next few weeks will be crucial.”

Clothier – a third generation cheesemaker from Bruton, Somerset – also added his backing for the dairy voluntary code, which was introduced to ensure that milk suppliers received a fair price. However, he said he still believed that its scope needed to be widened.

“The voluntary code is good, it is a good intention but it needs to be administered in an even way,” he said. “It’s either a voluntary code that everyone should be subjected to, even the co-ops, or it isn’t. That is the main area that needs some work. Farmers quite often look at the processors and say that they are the problem, but I think the whole chain, including the retailers, needs to be looked at as one.”