Monthly Commentary on Milk Price Changes

Published 2 February 18

A number of milk processors have applied milk price reductions to February prices, with falling wholesale markets cited as reasons for this. Arla’s reduction, of 1.73ppl, may have a knock-on impact on others, especially those who use a form of milk basket to set their own price. Some who give more notice have announced reductions in March.

As well as this, Freshways reduced its B price (10% of supplier’s milk) by 10ppl to around 20ppl (in December), which really highlights how much the processor did not want extra milk at the time.  

On average, UK wholesale prices continued to fall in January, with prices falling between 17 and 45% (for mild cheddar and butter respectively) in the past 6 months. However, there was a degree of stability in the latter stages of the month.

UK milk production has stagnated at present, similar to what was seen in 2015/16. If it continues on par with 2015/16 then we could see a slow rise to a quick short peak this spring. However, weather will be the key influencer to milk production developments.