6. Latest reports EU
output in April 2015
• Lower than same time last year output reported since
end of quotas in:
• France
• Germany
• Longer term, greatest in production expected in
Germany and Netherlands, as well as Ireland.
• UK output growing much slower: +1.1% for 2 weeks to
18th April 2015 yoy. Strong sterling damaging milk price
– lack of profitability.
• Ireland: anecdotal reports that production is up in most
co-ops.
• “Wall of milk”? Or small increase due to lack of
profitability?
9. Oceanian supplies still
rising to Feb 15 – more
slowly for NZ
Source: Dairy Australia, EU MMO
Feb 15
+ 6.4%
Source: DCANZ NZ: +3.2%
season to
end Feb.
Feb 2015
-4.9%
26. Glanbia price
commitment creates
level of price stability
through early peak
• March milk price
• Base = 29.5c/l incl VAT (28.04+VAT) + 1c/l from stability fund
(2014) (VAT part of 1c/l?)
• I.e. unchanged total payout of 30.5c/l incl VAT (28.99c/l +
VAT)
• Commitment for April/May
• Payout unchanged (unless major market disaster) at 30.5c/l
incl VAT
• Base may vary
• Top up from fund to compensate
• Some/all of the topup may need to come from new support
fund (to be voted on by shareholders in May)
• Another pressure for price stability through early peak:
farmer mobility…
27. Outlook for output?
• EU: Uncertainty about milk supply post quota, but some
evidence early output lower. Strong growth expected in certain
countries. Other regions output constrained due to low milk
prices
• UK: Cow numbers have grown over the past year (mainly NI),
indicating output levels could be maintained in short-run despite
poor Stg milk prices. Fewer replacement heifers in the system
• US: Concerns growing over impact of California drought. This,
combined with weak milk prices should contain overall output
levels, Culling up 3% yoy in 2015 . Forecast for year +1.7%.
• NZ: Output up 3.2% to end Feb with a forecast of +0,2% for
season to end May, early drying-off (drought & milk price )
expected to impact on Mar-May flows
• Summary: Moderate growth expected in US due to Californian
drought. EU suppliers may limit expansion in light of falling returns
as milk pricing comes under pressure post quota
28. Outlook for
markets?
• Cheese: Weak € & good domestic demand +
increased drying capacity in UK are positives for EU
against a background of lower output, but need for
‘short-buyers’ to re-engage to prevent further
weakening
• SMP: Expectations of plentiful supply ex. EU & US
continues to dampen buyer sentiment
• WMP: Increased supply volumes have encouraged
buyers to hold-off. Further price weakness expected
through out Q2
• Butter: Outlook unclear, mixed indications. US
demand/pricing will provide some support. Overall
market dynamic depends on extent of Q2 supplies in
EU