Milk Market

Following a 7.7% increase at the beginning of September, the GDT price index increased by a further 1.7%, the fourth consecutive rise, at the latest event held on 20^th September.  Butter and Anhydrous Milk Fats (AMF) increased by 7% and 3.6% respectively and are the main drivers.  Fat prices have risen significantly over the last few months with butter and AMF now back at 2013 levels.  But powder values are about half where they were three years ago.  Despite SMP values seeing an increase of 3% to $2,293 at the latest GDT event, as we have mentioned before, the large amount of stocks held in EU intervention stores, circa 500,000 tonnes (more than twice that sold to China in 2014), will continue to hold back these prices.

There continues to be movement in farmgate prices, although there is frustration that processors are not moving quickly enough.  Notable changes include:

• Dairy Crest Davidstow 1ppl price increase as from 1^st October, taking the standard litre to 23.72ppl and a further 0.5ppl as from 1^st November
• Both First Milk and Paynes Dairies have announced a 2ppl increase as from 1^st October
• All Arla members, including those supplying organic milk will see a 1.6ppl price rise as from 1^st October.  This takes the non aligned standard litre to 21.65ppl
• In contrast, the six monthly review of the Tesco’s aligned contract has seen a 0.1ppl reduction as from 1^st November, the new standard litre price will be 28.61ppl