Monthly Commentary on Milk Price Changes

Published 4 October 18

Dairy processors held their prices for the majority of contracts in October, although there were some increases. For the contracts that did change price, the increases were in the range of 0.2-1.1ppl but mostly above 0.7ppl. A full list of farmgate price changes can be found here.

Muller, Barber’s and Dairy Crest have all announced that they will be holding their prices in November.  Dairy Crest have also announced that it will be introducing a floor which means its price will not go below 30.90ppl prior to February 2019. This floor price includes the 0.5ppl supplementary payment introduced in September.

Improved weather conditions have given a boost to milk production in recent weeks. Average GB daily deliveries have gone from being about 1% behind year-ago figures in July to 1% above year-ago figures by mid-September. EU summer production figures are better than expected, with the impact of the drought less than was feared. This currently good supply of milk is adding some downwards pressure to the markets.

Wholesale prices for fats eased in September, with cream down and butter following, as the changed sentiment towards supply removed any urgency over securing product. AHDB’s Milk Market Value (MMV) indicator, based on UK wholesale prices, suggests positivity in farmgate prices will continue until November, though at a relatively low rate, but could start to turn slightly down in December.

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