Dairy farmers receive autumn uplift as prices near 45p/litre

Farmgate milk prices are set to lift to the highest point since February 2023, with the majority of dairy processors committing to further autumn increases.

Strong dairy commodity markets have been the driving force behind recent price rises, with UK butter values up by 81% on the year at £6,730/t in September as well as gains for cream, skimmed milk powder and cheddar.

Soumya Behera, senior dairy analyst at AHDB said: “The outlook for price changes in the next three months at least is extremely favourable, with the fats market in particular at record-breaking levels.”

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Milk supplies remain fairly tight overall due to seasonality constraints, but daily milk deliveries have increased slightly in recent weeks and have been trending above year earlier levels at 32.6p/litre.

Industry figures suggest margins for producers have generally improved on-farm in recent months, however remain below the highs of 2022.

Many dairy farmers producing milk with high protein and butterfat contents will also be receiving additional bonus payments.

Milk price moves

The conventional milk price for dairy farmers supplying Arla will lift by 1.69p/litre to 45.02p/litre in October for a standard manufacturing litre. Organic producers will receive a milk price of 55.89p/litre.

Arla Foods amba board director, Arthur Fearnall, said: “Commodity markets are continuing to increase, driven by fat-heavy products, especially butter.

“The increase is driven by the strong demand and additionally fuelled by the current lower milk volumes traditionally associated with this time of year and limited availability of fat in the EU. Overall, the outlook is slightly positive.”

First Milk suppliers will receive a November price of 43.85p/litre for a standard manufacturing litre, up by 1.25p/litre on levels a month earlier.

Mike Smith, vice chairman and farmer director at First Milk, said the co-operative had observed some positive momentum in dairy commodity prices and acknowledged the challenging on-farm conditions farmers were facing due to recent heavy rainfall.

Barbers Cheesemakers will pay its producers a minimum price of 44.57p/litre in November based on a standard manufacturing litre, with the potential for additional increases if commodity markets remain strong.

Muller will increase its milk price by a further 1p/litre to 42.25p/litre in November, based on a standard liquid litre.

Freshways followed suit, increasing its November milk price by a penny to 42p/litre. In September, Freshways also announced the acquisition of Totally Welsh Dairy.

Bali Nijjar, Freshways managing director said: “This acquisition will allow us to better serve our customers, with an expanded range of products while supporting local Welsh farmers.

“Additionally, the recent integration of Milk & More has strengthened our delivery capabilities, enabling us to meet the growing demand for convenient, sustainable dairy products.”