Drop in milk price equivalent as dairy commodities ease

Dairy commodity values generally eased between June and July, leading to a 1.3p/litre drop in DairyCo’s Actual Milk Price Equivalent.

Based on a basket of dairy commodity prices that put the AMPE at 30.9p/litre, while a drop in whey markets meant the Milk for Cheese Value Equivalent fell by 0.1p/litre to 32.7p/litre.

“UK wholesale markets for July were split into two distinct periods,” said the DairyCo report. “Prices remained stable in the early part of the month due to strong domestic demand, but then dropped off quickly due to competitive pressure from the EU.” The strengthening pound against the euro meant exporters were struggling and domestic traders were faced with increasingly competitive imports, it added.

UK milk production in the two weeks to 19 July was almost 8% higher than the same period last year, averaging 40.1m litres a day. That was 8.4% above the three-year average, said the report. “However, forage quality from first-cut silage suggests that such strong year-on-year increases in deliveries may not continue, as results suggest the average energy density is much lower than in 2013.”