Milk prices continue to climb in the UK

By Chris Wright, Partner and ARA specialist

As we approach the spring peak, the UK dairy sector is witnessing a steady rise in milk prices, with farmgate milk prices increasing in May and June.

Dairy processors have been adjusting prices upward in an effort to secure consistent volumes into the summer months, according to recent industry reports.

Current trends in milk production and prices

Farmgate milk prices have seen a notable increase, while total production volumes are running well below last year’s levels.

GB daily milk deliveries have decreased by 2.2 per cent compared to the same period last year, despite seeing steady seasonal increases throughout March and April.

This has been a crucial factor driving the rise in prices as processors scramble to maintain supply.

Improvements in grass growth, which have been recorded at 47kg/ha of dry matter daily for the week beginning 29 April by GrasscheckGB, are expected to help reduce feed costs in May, providing some relief for dairy farmers.

Global and regional market dynamics

The recent free trade agreement between the EU and New Zealand, effective from 1 May, could impact UK dairy exports, although the UK is expected to remain a key exporter of dairy products to the EU, according to Matt Darragh, analyst at AHDB.

Industry responses

In response to these dynamics, several major dairy processors have announced price increases. Muller is set to raise its standard liquid litre milk price in June by 0.5p to 38p per litre, including a 1p per litre advantage premium.

Crediton Dairy and Saputo Dairy are also increasing their prices by 1p and 1.5p per litre, respectively. Arla Foods has announced a price of 40.45p per litre for May, reflecting a 0.45p increase from the previous month.

As the dairy sector works through these changing market conditions, the rise in milk prices coupled with adjustments in the global dairy market poses both challenges and opportunities.

The industry’s ability to adapt to these changes will be crucial in maintaining a stable supply chain and supporting dairy farmers during these fluctuating times.

If you would like any expert advice and strategic insights into the sustainability and profitability of your dairy operations, please contact us.