For most of our dairy supply partners, May has been a very tough month with volumes on vehicles still reducing. Prices still look set to rise further on key dairy lines for the foreseeable future, with further updates planned throughout the coming months.
Prices are still set to continue to rise over the next few months with farmers experiencing cost increases in animal feed and additives. However, after a sluggish start to the growing season, grass growth seems to be more positive, so this will help with farmers costs with delayed payments from some of countries processors.
The dairy sector has faced a crisis due to COVID-19 and continued campaigning by the sector has led to the government offering English dairy farmers a support package of £10,000 each or up to 70% of their pre-COVID-19 income. This has been welcomed by the sector as the huge drop in demand and delayed payments from customers and wholesalers has placed the producers under considerable financial strain.
Another impact of the Covid-19 situation is line capacity. Milk processing capacity in the country relies on all factories running without incident. A site breakdown, particularly if repairs are difficult to source because of the lockdown, can significantly reduce our processing capability and lead to an increased risk of excess milk needing to be disposed of.