EUROPE: Rising global milk price has varied causes and effects.
The benchmark price for skimmed milk powder in the UK has risen by 60% in the last six months. The reasons behind this increase are manifold and include factors such as the price of milk falling below the cost of production in the UK resulting in a 50% decline in the number of dairy farmers over the past ten years; severe draught in Australia impacting production and rising demand from China where consumption is predicted to further expand by 15% for the next three years.
The effect of these price rises feeds through not only into the market for pure dairy products such as milk, cheese and butter but also to products which incorporate them e.g. chocolate, cakes and pizzas.
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