Production & Prices

The latest provisional figures for November show UK milk production is once again nearly 10% more than year earlier levels.  At 1,066.1 million litres it is the highest production in November since the 2003/04 milk year.  Cumulative production now stands at 9,004.8 million litres compared to 8,786.1 million litres at the same point in 2012 and 194.5 million litres more than the previous five year average.  Butterfat levels have lept from 4.08% in October to 4.17% in November as cows transfer on to their winter rations.  Cumulative butterfat levels now stand at 3.98% compared with 4.04% at the same time in 2012.

But the increase in production is not dampening prices; the UK milk price is at an all time high.  The latest farmgate milk price paid in October was 33.5p per litre, some 4.4p per litre more than in October 2012.  As reported last month, production is not just up domestically but also globally, however demand, especially from China and to a lesser extent from Russia, is still outpacing supply which is driving prices.

Further confirmation of demand was borne out at the last couple of Global Dairy Trade Auctions.  Results for 3rd December auction saw the all products price index rise by 3.9%.  Average WMP prices were up by 3.4% averaging $5035 per tonne even with a record 22,500 tonnes on offer.  Latest results on 17th December, saw the all products price index rise again, although by only 0.2%.  WMP fell by 1.5% but SMP continued to rise by a further 1.7% on the 17th December after rising 5.6% on 3rd December.  The butter price index has also risen sharply in the last two auctions by 4.5% and 7.9% to average $4,051 per tonne having fallen towards the end of October and beginning of November.