Milk Prices Reduce Further During May
- A high proportion of UK milk buyers reduced farmgate milk prices during April 2023. Further price reductions have been announced for May 2023 – see below.
- Most UK farmgate milk prices for May 2023 are now within the range 38.00ppl – 42.00ppl, depending on the type of supply contract.
AHDB milk production data shows that UK milk output for March 2023 is estimated at 1,321.81m litres (before butterfat adjustment) – an increase of 11.20m litres on a year-on-year basis. This means that cumulative UK production for the 2022/23 milk year stands at 14,904.65m litres (before butterfat adjustment). This suggests that UK output for the 2022/23 milk year will be a mere 7.86m litres lower than that of the 2021/22 production year. After such a slow start to production in the first half of the milk year, it has been quite a recovery during the last six months.
The UK average milk price for February 2023 is estimated at 48.06ppl – down 1.13ppl from the January 2023 average price (49.19ppl).
Farmgate Prices: May 2023
Farmgate milk prices continue to reduce quite significantly as the country moves towards the period of peak milk production during May. With the value for AMPE reducing to 31.81ppl during April (see table, right) and prices reducing across the board for dairy commodities, further reductions to farmgate prices may well follow after the month of May. AHDB data shows that the value of cream income to a liquid processor has reduced from 16.53ppl to 8.83ppl between September 2022 and April 2023, reinforcing the downward price trends. For many dairy farmers, the farmgate milk price for May 2023 will now be approaching or below the cost of production.
Announcements for April & May 2023 are as follows:
- Arla Foods amba – The Arla milk price reduced by 6.00-euro cents from 1st April 2023. The manufacturing standard litre price reduced by 5.31ppl to 39.64ppl. The liquid standard litre price reduced by 5.10ppl to 38.08ppl.
- Arla Direct milk price – 5.31ppl price cut from 1st May 2023. The manufacturing standard litre price reduces to 37.09ppl. The liquid standard litre reduces by 5.10ppl to 35.60ppl.
- Tesco – The Tesco Sustainable Dairy Group (TSDG) milk price is to increase by 1.01ppl from 1st May 2023. The price increase results from a decision by the retailer to revert back onto the Tesco cost of production tracker for milk pricing. The increase takes the liquid standard litre price up to 43.51ppl. The milk price will increase to 43.26ppl for Arla TSDG members.
- Sainsburys (SDDG) – The SDDG will reduce by 0.99ppl from 1st May 2023. This takes the liquid standard litre price down to 42.91ppl for Müller suppliers. The farmgate milk price for Arla members of SDDG will reduce to 42.79ppl.
- Co-op – Farmgate prices are reducing by 0.82ppl from 1st May 2023. This takes the liquid standard litre price down to 42.15ppl for May 2023.
- Müller Direct – Prices are set to reduce by 2.50ppl from 1st May 2023. This takes the liquid standard litre price for Scottish suppliers down to 39.75ppl.
- Müller Lidl – reduction of 2.50ppl to the Müller-Lidl fixed price contract from 1st May 2023. This reduction is in line with the reduction to the Müller Direct milk price and takes the liquid standard litre price down to 40.00ppl.
- First Milk – reduction of 3.40ppl from 1st May 2023. See Milk Price table, below.
- Fresh Milk Company – reduction of 2.20ppl from 1st May 2023. This takes the liquid standard litre price down to 37.30ppl. See table below.
- Yew Tree Dairy – reduction of 3.00ppl to A volume litres from 1st May 2023. This takes the liquid standard litre price down 39.00ppl.
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