Monthly Commentary on Milk Price Changes

Published 4 December 17

Stable farmgate prices in December for most

In the build up to Christmas, the majority of processors held their prices and some for a consecutive month. A few - two supermarkets and Dairy Crest, implemented increases to their contracts.

Wholesale prices have continued to fall and it will be interesting to see what happens in the New Year. Müller have already announced a January cut of 1.5ppl to its direct farmers due to falls in the cream and butter markets. The fat markets have been supporting milk price rises but the shift is likely to cause others to follow suit.

As previously mentioned, butter markets will dictate the direction of milk prices, due to the contribution to AMPE. Butter typically accounts for around 45-50% of the value of AMPE, recently though this has risen to more than 70%.