Will UK milk prices peak in September?
- UK milk output is well behind last year. At the end of July 2022, the UK is 82.98m litres lower than last year.
- UK milk prices may be about to peak. Signals from the market show that world wholesale prices for dairy products are easing, although EU prices remain high in the face of declining volumes.
- The main concern for most dairy farmers is how long will prices remain at current levels.
The latest milk production statistics from AHDB indicate that output for July 2022 is estimated at 1,238.49m litres (before butterfat adjustment) – a reduction of 11.03m litres compared against July 2021. Cumulative production for the 2022/23 milk year to the end of July 2022 stands at 5,224.98m litres (before butterfat adjustment), which is 82.98m litres lower output compared with the same time last year.
UK milk price for June 2022 is estimated at 42.66ppl. Farmgate milk prices have continued to rise further during July and August and prices are now well above the June average. However, the extent of the various price increases now appears to be slowing and signs from the market suggest that UK farmgate prices may well peak during the autumn – assuming all things remain equal.
Farmgate prices: August / Sept 2022
The main price changes for August / September 2022 are shown below:
- Arla direct supplies – The 1.59ppl price increase (to the liquid standard litre) for August 2022 is revised upwards by a further 0.86ppl. The liquid standard litre for August is revised to 45.89ppl.
- Arla Foods amba – hold milk prices from August into September 2022. The liquid standard litre holds at 48.42ppl. The manufacturing standard litre (4.2%BF & 3.40% protein) holds at 50.35ppl.
- Arla Foods organic – Organic suppliers will also see prices hold from August into September 2022. The liquid standard litre holds at 53.87ppl and the manufacturing standard litre remains at 56.01ppl.
- Müller Direct – Müller Direct milk price will increase by 1.00ppl from 1st September 2022.
- Fresh Milk Company – 0.92ppl increase confirmed from 1st September 2022. This takes the liquid standard litre price up to 47.32ppl (see Milk Price table below). The manufacturing standard litre price increases by 0.95ppl to 49.20ppl.
- First Milk – FM milk price will increase by 2.14ppl from 1st September 2022.
- Yew Tree Dairy – 2.00ppl increase confirmed from 1st September 2022. The 2.00ppl increase is to be applied on all A litres. This takes the milk price up to 48.00ppl for all A litres supplied.
- Co-op – suppliers will receive 0.67ppl increase from 1st September 2022. The Coop milk price tracks Sainsburys (SDDG), Müller Tesco (TSDG), and Müller Milk Group prices. This latest price increase means that the liquid standard litre price for September 2022 moves up to 47.00ppl.
- Sainsburys (SDDG) – confirm a hold milk price for September 2022. Müller members of the SDDG hold at 47.00ppl for the liquid standard litre, whilst Arla members hold at 46.88ppl.
- Tesco (TSDG) – 1.00ppl increase from 1st September 2022. The liquid standard litre for Müller TSDG increases to 47.00ppl, and to 46.75 ppl for Arla TSDG suppliers.
Wholesale prices beginning to ease
As evident from GDT (Global Dairy Trade) auctions, prices for dairy products are now easing back slightly. The same trend is now becoming apparent for UK wholesale prices as shown below.
Cull cow trade
Dairy cull cow prices remain high with cull cows currently making over £4.00/kg DWT. Demand for cheaper cuts is no doubt being driven by the increase to the cost of living.
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