The dairy markets have remained largely unchanged over the last week and there are no reports of milk not been collected from the farmers. Most of the excess milk in the country is being used in storable products, rather than being poured away, which is of course positive, but in some areas of the country farmers are still being asked to reduce their milk levels by up to 5%.
The dairy industry is waiting to hear what the government’s plans will be about social distancing and its plans to let business re-open over the next few weeks. This will have a massive impact on the industry and allow workplace canteens and coffee shops to start ordering dairy products again. We anticipate that these sites will be very cautious in ordering so that they minimise the amount of potential waste.
We should also be mindful that the milk processing capacity in the country relies on all factories running without incident. A site breakdown, particularly if repairs are difficult to source as a result of the lockdown, can significantly reduce our processing capability and lead to an increased risk of excess milk
needing to be disposed of by the country’s dairy farmers.
For most of our dairy supply partners, May will be a tough month with volumes on vehicles still reducing. Prices still look set to rise further on key dairy lines for the foreseeable future.