With bulk cream prices firming steadily, butter prices have also recovered strongly. Some September business has been written at £2,100 a tonne for bulk unsalted, according to one trader. Raw milk supplies are still on the short side, leaving another trader speculating that the UK may not fill its quota this year. Cumulative milk deliveries to the end of June are nearly 154 million litres under profile adjusted to 3.95% butterfat. This represents a 4% shortfall on quota for the year so far. The British dairy industry is technically led and is unlikely to finish the year with unused quota. Spot prices are quite high, reaching the 20ppl milestone at times, where milk is available. However, producers paid on Intervention Milk Price Equivalent guidelines will be receiving less than that: at the end of June, the IMPE rate was 16.79ppl. This is just one oddity of a currency-driven market and is the result of supply and demand taking second place after the exchange rate. The weather, though, is also to blame: milk yields drop dramatically in cold and wet weather. And a drop in the number of cows in the milking herd would multiply this effect, as would falling numbers of active producers. {{PROVISIONS }}

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