Forward Market Performance (FMP)

Published 8 May 19

The future milk value equivalent (FMPE) was unchanged from last month, as contrasting movements on the SMP and butter markets cancelled each other out. Settled prices on SMP contracts generally declined through March, potentially from expectations of increased supply from the flush.  In contrast, settled prices on butter contracts rose through the month, suggesting an expectation of tighter supplies after the flush. The overall effect of this was that FMPE stayed flat.

On EU wholesale markets, SMP prices increased marginally but not enough to compensate the drop off in butter prices. The lower butter prices weighed in on EU AMPE in April, which was down marginally on the previous month.

In contrast, settled prices on SMP futures contracts for July 2019 increased through April, pulling up FMPE. Settled prices for July butter contracts remained stable. The forward market indicator (FMP) remained positive this month, and is up considerably on March. This suggests that there is an expectation of tighter availability as we move into the summer months.

 FMP Graph


FMP Table

*Forward Market Performance (FMP) is AHDB Dairy’s market indicator which monitors the difference in current market prices and prices traded on futures contracts (see note below). The aim is to provide some indication of what those trading futures believe the supply and demand relationship could be over the coming months. The comparison is between an Actual Milk Price Equivalent (AMPE) price and a Future Milk Price Equivalent (FMPE) price. Both are quoted in Euros to limit exchange rate implications, as there is no Sterling futures prices. FMPE is calculated in the same way as AMPE, but using futures prices from the European Energy Exchange. FMPE is calculated four months in advance of AMPE, as this is generally where most of the trade is completed.

FMP is the relationship between AMPE and FMPE. As mentioned, it is about the traders' views of the potential supply/demand relationship in the future. Therefore, a negative figure indicates that those involved in the futures market during that month feel there could be relatively high supply and the market will become supply focused in the coming months. A positive figure means those trading futures believe supply will become tight, pushing demand and causing the market to become demand focused.


FMP does not tell us how much milk prices will change by but, combined with other market commentary, can give an indication of the potential movement, or trends, in prices. It is also important to remember, at present, the amount of product traded through the futures market is small.


Futures prices are from the European Energy Exchange (EEX). Futures pricing gives an indication as to where the market may go in the future. They are not set in stone and are subject to change on a regular basis. This webpage will be updated weekly with the first days settled prices (usually Mondays but can be Tuesdays). Trade over the futures market is very slim and therefore these figures should be viewed as one indication of the market movements and not actual developments.

Actual Milk Price Equivalent (AMPE) is a market indicator for the dairy sector to provide broad, general estimates of market returns. The value of market indicators is a basis for identifying trends and to use them for more precise purposes goes beyond the limits of their scope and accuracy.