Milk prices continue to hold as spring flush approaches

Most dairy processors have held farmgate milk prices during April and May with commodity markets standing firm.

Wholesale butter and cheese prices lifted slightly during March, while cream and skimmed milk markets remained stable.

Farmgate milk prices in April are up by roughly 8p/litre on the same month last year, which along with lower feed costs on-farm, is helping to create a margin for producers.

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Felicity Gale, farm services specialist at Kingshay, said concentrate feed prices were lower on the year and the margin over purchased feed a cow was up by 28% in January.

The AHDB Dairy milk-to-feed price ratio also remains exceptionally high, encouraging producers to feed more and increase milk production.

UK daily milk supplies have risen in the last month and were roughly 2.7% higher on the year during March.

Looking forward, supplies are forecast to increase further throughout April as the spring flush approaches.

Soumya Behera, senior dairy analyst at AHDB said: “Easing feed costs will promote farmer confidence and business expansion, but this could be offset by other costs such as labour, environmental regulatory compliance and replacement heifer costs.”

GB milk production for the 2024-25 milk year is forecast to be up by 1% on the year at 12.4bn litres.

Early estimates suggest that production could increase by a further 1.2% during the 2025-26 milk year to 12.6bn litres, despite a declining milking herd.

Milk price announcements

Major processor Muller has confirmed it will hold its milk price at 42.25p/litre in May for a liquid litre, including its quarterly advantage premium.

Dairy co-operative First Milk will continue to pay its farmers 45.35p/litre for a manufacturing litre, including its member premium.

Mike Smith, farmer director at First Milk, said: “Dairy market signals are mixed on both price and volume, while our solid business performance has allowed us to maintain stability in our price.

“As we move into a crucial period for milk production here in the UK, we recognise that future market returns may come under increasing pressure.”

Barbers Cheesemakers has announced it will hold its milk price at 45.08p/litre for a manufacturing litre in May, this follows a 1p/litre deduction in April.

Meanwhile, Arla has held its milk price again in April. However, after accounting for its quarterly exchange rate adjustment it will decrease by 0.25p/litre to 48.02p/litre for a manufacturing litre.

The processor says the outlook is stable, with global milk supplies increasing as retail sales grow.

Freshways has bucked the wider trend with a 2p/litre price cut in May.

Freshways managing director Bali Nijjar said: “Excess liquid milk within the marketplace has seen spot milk prices as low as 30p/litre.

“As a result, we have lost business and had to reduce prices to avoid any further losses.”

Mr Nijjar also confirmed that no further price decreases would be announced by the processor for at least three months.