Lakeland Dairies CEO Colin Kelly believes global milk flows will reduce as the year moves on because of the severe milk price cuts at farm level.

He told the Irish Farmers Journal: “I followed your coverage last week and I think the mid to high 30s [cent/litre] at the moment, we’d align to that. I’m meeting regional committees this week and my own view is that the milk price cuts are so severe, we’ll have to see a supply correction this year.

“A lot of farmers around the world will be losing money and the other piece is because beef price is so good you will see culling across Europe, and potentially in the US.”

Markets

“So I would be positive on the second half of this year and when markets do bottom out we’ll see positivity on the second half of the year and pretty positive into 2024.”

Kelly added: “The demand piece is ultimately around China. While the Chinese import numbers of whole milk powder are down 68% in the first two months of 2023, it must be put in the context that only 7% of dairy product is traded with China typically buying 25% of that.”