Surge in global dairy trade offers uplift for UK milk prices
© Tim Scrivener A jump in wholesale dairy values at the latest fortnightly Global Dairy Trade (GDT) auction on 6 February is expected to lift UK farmgate milk prices, according to dairy sector analysts.
The GDT price index rose by 4.2% to average US$3,571/t (£2,862/t), with butter, cheddar, skimmed milk powder and whole milk powder all making notable gains.
At Dairy-Tech in Warwickshire on 7 February, panelists suggested this increase would be good news for British farmers, especially for those supplying cheesemakers.
See also: Milk price holds announced amid supply increases
Royal Association of British Dairy Farmers chairman Robert Craig said following the latest GDT results there was a bit more optimism for the future than there had been.
Farmgate milk prices have generally been ticking up so far this year, according to Diarmaid Mac Colgáin of Concept Dairy.
He said the most relevant part of the GDT auction was the cheese component, with cheese values up by more than 5%.
“That would indicate that any cheese suppliers might see a bit more (upward) pressure on the cheese price, and it could lead to an increase of about 1-2p/litre,” added Mr Mac Colgáin.
Looking ahead, Freshways chief executive Bali Nijjar was fairly optimistic from a farmer price perspective for 2024, compared with the low prices seen in the past year.
However, Lyndon Edwards, AHDB dairy sector council chairman, added that, despite this increase, milk markets were still quite fragile and the industry needed to protect the image of dairy and promote the products well to secure the sector’s future.
New Freshways factory
Freshways announced at Dairy-Tech plans to move its operations to a new site in the West Midlands.
Mr Nijjar said a new facility would open in West Bromwich and should be up and running in the next 18 months.
The site is forecast to process about 400m litres of milk/year and, once operational, the company’s existing site in Acton, London, will be closed down.