High output forcing UK prices down
- UK milk output increased to 1,256.09m litres during January 2023 (up 22.91m litres on the year).
- 2022/23 has been characterised by low milk volumes during the first half of the year and high milk volumes during the second half of the year.
- Elevated milk output across the UK and the EU coupled with reducing product demand is triggering milk buyers to cut farmgate prices.
- The spring flush of milk will bring further downward pressure on prices.
AHDB milk production data shows that output for January 2023 is estimated at 1,256.09m litres (before butterfat adjustment) – an increase of 22.91m litres on a year-on-year basis. Cumulative UK production for the 2022/23 milk year to the end of January 2023 stands at 12,486.27m litres (before butterfat adjustment). Cumulative production for the 2022/23 production year has been running behind 2021/22 production levels for most of the 2022/23 production year, however, that has changed during January 2023. Cumulative production to the end of January 2023 is now 13.13m litres higher than the same time last year. At the time of writing, the UK average milk price for January 2023 is not yet available from DEFRA or AHBD. The UK average milk price for December 2022 was previously reported at 51.51ppl and represents a record high, however, UK farmgate prices are now reducing across the board for March 2023 (see below). Given the usual rise in milk output towards May each year, further price reductions are expected.
Farmgate prices: March 2023
Announcements for March 2023 are as follows:
- Sainsburys – Members of the Sainsbury Dairy Development Group (SDDG) will receive a 2.06ppl price reduction from 1st March 2023. This takes the liquid standard litre price down from 46.50ppl to 44.44ppl for Muller suppliers. Arla members of SDDG will receive the same 2.06ppl reduction from 1st March 2023 and will see their prices move down from 46.38ppl to 44.32ppl.
- Tesco – The Tesco Sustainable Dairy Group (TSDG) milk price is to reduce by 3.00ppl from 1st March 2023. The decrease takes the liquid standard litre price down from 47ppl to 44ppl, in line with the Müller Direct milk price reduction (below).
- Müller Direct – 3.00ppl price cut confirmed from 1st March 2023. This takes the liquid standard litre price for Scottish suppliers back to 43.75ppl (44ppl for English & Welsh suppliers). See table, below.
- Müller organic – 2.00ppl price cut confirmed from 1st March 2023. The organic farmgate milk price reduces to 53.00ppl for March 2023.
- Müller Lidl – 3.00ppl price cut to the Müller-Lidl three-year fixed price contract from 1st March 2023. The reduction is in line with the reduction to the Müller Direct milk price and takes the liquid standard litre price down to 44ppl from 1st
- Co-op – 2.68ppl price reduction confirmed from 1st March 2023. This takes the liquid standard litre price down from 46.83ppl to 44.15ppl.
- First Milk – 4.00ppl price cut from 1st March 2023.
- Fresh Milk Company – 00ppl price cut confirmed from 1st March 2023, liquid standard litre = 41.81ppl.
- Yew Tree Dairy – 3.00ppl reduction to A volume litres from 1st March 2023. This takes the liquid standard litre price down from 47ppl to 44ppl.
- Arla Directs – 2.65ppl price cut confirmed from 1st March 2023. The manufacturing standard litre price reduces to 45.93ppl & the liquid standard litre reduces to 44.09ppl.
- Arla Foods amba – There was a late announcement at the end of January 2023 in relation to the milk price for February. The Arla milk price reduced by 3.00-euro cents from 1st February 2023. The manufacturing standard litre price reduced by 2.65ppl to 48.47ppl whilst the liquid standard litre price reduced by 2.54ppl to 46.57ppl.
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