Winter milk supplies will crash to well below one billion litres during the trough if current supply profiles continue, leading to more shortages of dairy products. Production in July was 1098 million litres, compared with 1,155 million litres last year and a high in July 2003 of 1,232 million litres. Over the past four years November production - the trough month for milk supplies - has ranged from between 85% and 90% of July's. On that basis November's production will be around 950 million litres. It will be only the second time UK dairy farmers have failed to hit the 1 billion threshold for a month. This is why dairy companies are offering significant price incentives in a bid to prop up supplies, with First Milk offering the highest incentive price of 28ppl for farmers producing more milk than they did last year. But with animal feed prices up £40 a tonne over last year, equivalent to 1.2ppl, and cows underperforming, the incentives are unlikely to stimulate significant volumes say experts.

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