Market indicators suggest end to price cuts

Published 2 March 18

It is well recognised that average GB farmgate milk prices move in line with the value returned from the market, although with a time delay. While other factors such as availability of milk supplies and delays in negotiating sales contracts can also impact on price movements, trends in AMPE and MCVE1 provide an excellent indicator of where farmgate prices will be in 3 months’ time.

The decline in market returns during the last few months of 2017 provides a clear indication that farmgate prices would come under pressure in 2018. However, latest wholesale prices have shown an end to that downward movement, for now. Early indications suggest farm prices may settle or even move up again after the spring flush, although the deciding factor will be how wholesale markets hold up through the peak production period.

GB market v farm prices Mar18

1projected price determined by an average of AMPE and MCVE (20:80 split)