Agribusiness News March 2025 – Milk

Milk production data

Milk production continues to stay ahead of last year, with GB volumes for January up 2.2% to an estimated 1,047m litres. The latest data from AHDB puts daily production at 33.89 million litres for the week ending 15^th January, 1.6% above the same week last year.  UK production for January was estimated at 1,283 million litres, 3.3% more than in January 2024.

Farm-gate prices

At the time of writing, Müller, First Milk and Graham’s announced price holds for March. Aligned supermarket contracts are on average running at much lower prices, with Müller Coop at 40.95ppl and Tesco at 40.02ppl for February. Organic milk prices are currently around 56-68ppl depending on the contract.

Milk Prices for Nov/Dec 2024 Scotland		Standard Ltr ppl
First Milk2		Mar	45.35
Müller - Müller Direct - Scotland 1, 3		Mar	42.25
Grahams1		Mar	40
Arla Farmers2		Feb	48.27
Lactalis / Fresh Milk Co.2		Feb	44.72
1	Liquid standard litre – annual av. milk price based on supplying 1m litres at 4.0% butterfat, 3.3% protein, bactoscan = 30, SCC = 200 unless stated otherwise.
2	Manufacturing standard litre - annual av. milk price based on supplying 1m litres at 4.2% butterfat, 3.4% protein, bactoscan = 30, SCC = 200 unless stated otherwise.
3	Includes 1.00ppl Müller Direct Premium. Haulage deducted depending on band for 2023 vs 2021 litres, ranging from -0.25 to -0.85ppl.

 

Dairy commodities & market indicators

With the exception of bulk cream, average monthly wholesale prices for dairy commodities continued to decline, with the biggest drop seen in butter, back 4% from the January price. Trade was fairly quiet with buyers keen to wait and see what happens with increasing volumes and product availability ahead of the spring flush. However, stocks of butter are still reported to be low. With mild cheddar only down 1% in February, the market indicator MCVE showed little change from January, down just 0.25ppl. However, AMPE dropped just over 2ppl on the back of butter and SMP prices easing. The Milk Market Value (MMV) indicator fell 0.64ppl to 43.00ppl for February, the fourth consecutive drop since October (46.37ppl).

UK dairy commodity prices (£/tonne)	Feb	Jan	Aug
	2025	2025	2024
Butter	5,920	6,180	6,100
Skim Milk Powder (SMP)	2,020	2,090	2,020
Bulk Cream	2.626	2,630	2,703
Mild Cheddar	3,960	3,990	3,860

UK milk price equivalents (ppl)	Feb	Jan	Aug
	2025	2025	2024
AMPE	42	44.01	42.68
MCVE	43.25	43.5	40.95

© AHDB [2025].  All rights reserved.

 

The latest GDT auction (18th of February) resulted in little change in the price index from the previous auction, moving down by just 0.6% to a weighted average price across all products of $4,370/t. Only butter was up in price (+2.2%) and the biggest falls were seen in cheddar and lactose, both down 3.4%. The previous two auctions showed overall positive changes, with the price index up 3.7% in late January and 1.4% in early February.

 

Investment at Scottish creamery

Arla has announced plans to invest nearly £90 million into its Lockerbie creamery, with the aim of creating a “centre of excellence” for manufacturing Lactofree and UHT milk. The creamery’s cheddar production facility also benefited from a £34 million investment last year. While this is seen as a positive move for Scottish producers, with the investment doubling the site’s milk processing capacity and creating 90 jobs in the local area, it comes at the expense of Arla looking to close its creamery at Settle, North Yorkshire, towards the end of 2026 with the loss of over 120 jobs.

 

Scottish dairy herd trends

According to the Scottish Dairy Cattle Association, there are 764 dairy herds in Scotland (as of 1^st January 2025), which is 30 less than the previous year and nearly 24% less than ten years ago. Cow numbers have remained relatively stable, and the average herd size is now 236. The highest number of herd losses was seen in Ayrshire, with a net loss of 15, followed by Dumfriesshire (net loss of 5 herds).

 

December dairy costings

The latest monthly costings from Promar for December 2024 revealed a daily yield per cow of 28.4 litres, with 6.49 litres being produced from forage. Concentrate use was 0.37kg/litre, with a total feed cost of 11.71ppl and a margin over purchased feeds of 34.15ppl. Compared to 12 months ago (December 2023), the milk price is up 20.5% and feed costs are down 5.8%, resulting in the margin over purchased feeds being 33.3% higher.

Lorna MacPherson, lorna.macpherson@sac.co.uk