Expansion of GB dairy sector will increase price volatility

Published 18 March 15

GB dairy farmers can expect to see a more volatile cycle of milk prices as the industry pursues growth. Strategies to expand the industry must rely on exports as there is only limited potential to grow the domestic market. The need to compete in global commodity markets means prices will more closely follow the peaks and troughs of global markets.

Historically, GB prices have been less volatile than in the rest of Europe, although they have followed similar patterns. The GB price most closely shadowed movements in EU prices when GB milk production was rising and a greater proportion of product was exported. During periods of declining production, such as in 2012/13, GB prices followed the EU trend less closely as shortfalls in domestic supply meant fewer products were exported.

expansion of the GB dairy industry