Dairy

The key factors attributed to the increase in dairy prices in 2007 were the drought in Australia which led to a significant drop in milk supply (approx 3 billion litres) coupled with increased demand from developing countries such as China and India. According to the European Commission, dairy prices fell in 2009 as a result of various factors, including an increase in global dairy output and a fall in global demand connected to the economic crisis.

In 2009 the European Commission began buying stocks of skimmed milk powder and butter to arrest declining prices. The dairy market has been improving of late with prices for most commodities seeming to stabilise, with a significant increase in the price of butter in 2010 which has resulted in tightened supplies in the UK.

Source: MDC Datum. Figures used are UK Wholesale Prices.