UK farmgate higher than EU when markets are low

Published 20 April 18

Compared to key EU counterparts*, average UK farmgate prices tend to occupy the top spot in a league table when markets are low.

The graph below shows the UK farmgate position compared to key EU counterparts and AMPE.

20.04.18 UK farmgate position graph

Out of the six key EU producers, the UK sat sixth, and last, 53 times between Jan 08 and 18 (out of 121 months) and only topped the league table 10 times.

20.04.18 UK farmgate position table

The relative movement with AMPE will largely be down to market exposure. The average farmgate prices from all the other EU countries will be affected more by the global markets than the UK. This is because they have more activity with exports and less reliance on respective domestic markets. As a result, their farmgate prices move quicker when markets change.

What is less clear is why the UK spends so much longer at the bottom of the table than they do near the top. Over the next few weeks, AHDB will attempt to answer that question by looking at the key differences between the countries that could impact on farmgate milk prices.

 

*key EU counterparts consist of Denmark, Germany, France, Ireland and the Netherlands

Note: prices have been converted from €/100kg using average exchange rates for the respective months. This was sense-checked verse a set exchange rate, which shows little difference in the overall pattern.