Monthly milk supplies in NI fell for the second consecutive month compared with previous year’s levels by reducing by 0.97% in May, according to figures released last week by DAERA.

May is peak milk production month in NI and, this year, 2.2m less litres were produced on farms compared with the 226m litres produced in May 2015. Although monthly production has been dropping since April, production is still ahead of 2015 levels in the first five months of 2016 by 9.37m litres or 0.95%.

However, sources in the trade report that NI supply has now dipped significantly, particularly from mid-June onwards, although it will be a few weeks before this is confirmed in official figures.

Across Europe, according to the EU Milk Market Observatory (MMO) report last week, production increased by 5.6% in the first four months of 2016 and was 1.6% higher in April compared with levels from a year earlier.

Despite that, lower milk output across the EU is forecast in the second half of 2016 with overall production estimated to increase by 1.4% over the year compared with 2015 levels. Globally, production increased by 3% from January to April and the Food and Agriculture Organisation has forecast that 2016 supplies will be 1.6% ahead of 2015 levels.

Although the GDT dropped by 0.4% in New Zealand on Tuesday, dairy product prices have generally improved since May, particularly for butter and whole milk powder.

But the MMO report states: “Despite the overall improvement of market sentiment, a correction on the supply side is still considered necessary.”