Milk Production and Prices

UK milk production for October stood at at 1,192.8 million litres; 38.1 million litres more than in September.  This is the first monthly rise since May.  However, there hasn’t necessarily been an upturn in production as such, with the month-on-month increase more to do with the extra day in October.  Since the peak in May production has been steadily falling, but this now shows signs of flattening out.  It should be noted that October’s output was still 3.1% higher than the corresponding month last year, so out put could be stabilising at a higher level than we have historically seen.  The next update on production will not be available until into the New Year.

With regards to prices, the UK average milk price for October increased for the second month in a row to 24.23p per litre; 0.62p per litre more than in September.  But this was partly due to bonus payments received by some producers.  The average price still remains 18% lower than year earlier levels.  The following milk price announcements have been made:

• All First Milk suppliers except the Midlands Milk Pool will see their ‘A’ milk price lowered from 1^st December.  Scottish suppliers will receive a 0.3p per litre cut.  Those supplying Northern England or a creamery will see a 0.43p per litre reduction.
• Muller has said it is holding its milk price for January.  It has also announced its October supplement  (from retailer initiatives) for those farmers on non aligned contracts is 1.751p per litre.
• Dairy Crest has also announced it will be holding its milk price for all its standard liquid contracts in January.  In addition its liquid retail supplement for November’s milk will be 0.67p per litre and it is estimating December’s supplement to be 0.90p per litre.