Farmgate milk prices stay flat with processors cautious

Jittery markets have left most dairy processors noncommittal to any milk price moves during January and February, with many continuing to hold farmgate prices month on month.

Wholesale dairy markets were well supported throughout 2024 and were on an upwards trajectory for much of the year, however, butter and cream prices have started to fall back more recently.

Milk market indicators, actual milk price equivalent (Ampe) and milk for cheese value equivalent (MCVE) also both appear to be trending down.

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Arla held its milk price at 48.54p/litre for January, but the co-operative has indicated that the outlook appears slightly negative due to uncertainty on commodity prices development.

Muller, Saputo, First Milk and Barbers Cheesemakers also all look set to hold farmgate prices in the short term.

GB milk supplies continue to track about 3% higher than this time last year, adding further pressure to farmgate prices.

Global markets

Wholesale butter prices in both the US and EU have started to ease, while skimmed milk powder has received more support in global markets.

Multinational banking group Rabobank has forecast milk supply growth of 0.8% in 2025, although expects margins on farm to potentially improve moving forward.

Longer term, The EU Commission has forecast EU milk production to decline, with growth in milk yields no longer able to keep up with contraction in the dairy herd.

The EU agricultural outlook 2024-2035 said the production of cheese and whey products in the EU would continue to grow, albeit at a slower pace than in the past.

Overall EU consumption of dairy products is expected to remain stable, according to the outlook.