Dairy processors need to pay at least 35p/litre to secure milk supplies this summer, The Dairy Group has warned. Although UK farmgate milk prices have recently risen on the back of improved global commodity markets (see right), further increases are needed to offset higher production costs, which have now reached an average of 34p/litre. In the past three weeks, European dairy markets had increased by 7-8%, while southern hemisphere prices were up 30%, said consultant Nick Holt-Martyn of The Dairy Group. Further UK price rises were on the way, but the UK market was typically slow to react to commodity markets due to its focus on core products such as liquid milk and cheese, he added.
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