Market drop puts more pressure on farmgate prices

Published 27 November 18

Falling cheddar and butter prices have pulled AMPE and MCVE down again in November. The latest indicators are sitting at 27ppl and 31ppl respectively, their lowest levels since March. As a result, AHDB’s projected farmgate price model is predicting average farmgate milk prices will come under further pressure from February 2019.

 Projected farmgate prices Nov18

Historically there has been a strong relationship between the AHDB market indicators and overall UK farmgate milk prices, with farm prices falling around three months after the market. The impact on individual farm prices will depend on the market their customer operates in, how exposed they are to market volatility and the price-setting mechanism they use.