Milk Prices and Production

As processors start to introduce their winter pricing, the average UK farmgate milk price for September actually increased by 0.33p per litre to 23.6p per litre.  This is the first increase seen since November 2013, although the average price is still 23% lower than that in September 2014.  But average prices only tell half the story, as contracts vary so much.  Producers on contracts with the  processors at the bottom of the AHDB Dairy price league table (i.e. First Milk) are receiving half the price of those who have contracts with processors at the top of the league (Dairy Crest M & S).

Helping to stabilise prices is the slow-down in production.  September’s production was 3.5% less than in August and only 0.8% more than in the same period last year.  There hasn’t been a huge amount of action regarding price changes over the month, the main announcements are:

• Arla Foods has said it will maintain its members’ December milk price, the second consecutive non-movement
• Dairy Crest’s formula milk price will rise by 0.086p per litre for December due to higher cream prices
• Muller Wiseman’s non-aligned producers will receive a 1.751p per litre supplement for their October deliveries due to the latest retailer initiative, and
• Barbers, Wyke Farms and Belton Cheese have all announced a 1p per litre reduction from 1^st December