Number of UK farmgate rises ‘very unusual’

Farmgate milk prices have continued to rise in March, with processors reacting to the increasing returns from the market over the last few months.

Price increases, though, were generally smaller than those announced last month.

Most producers are making positive to steady moves on the retail-aligned contracts, according to the levy body, the Agriculture and Horticulture Development Board (AHDB).

However, market analyst Chris Walkland said although the increases might appear low, there has been an unprecedented number of price rises.

He also said fat and protein levels are generally high, so farmers being paid on constituents are earning more than 40ppl.

Sainsbury’s saw an increase of 0.03ppl, while M&S held on to its price for the last four months. Co-op Dairy Group and Tesco are holding steady after their price increases last month.

On non-aligned contracts, prices continue to be steady for another consecutive month.

Other processors made no change to their prices for March. Muller Direct and Freshways will continue to hold on to their pricing starting in November.

Most cheese manufacturers on the AHDB league table announced more significant increases than those on liquid contracts.

Saputo announced an increase of 1.50ppl, while First Milk, Leprino Foods, and South Caernarfon Creameries each increased their March prices by 1.00ppl.

Lactalis has increased its milk price for three consecutive months, increasing by 0.52ppl in March.

Manufacturing contracts have remained steady.

Mr Walkland said, on the surface, the price does not look to have risen much, but there has been significantly more increases than in any other year except 2022, which is excluded because it was such an exceptional year.

He said if you take all the leading processors and add their increases together, there have been 39 price increases this year so far.

There was one rise in 2018, four in 2019, 12 in 2020 and 10 in 2021. The nearest was 2017, with 35 increases.

“It’s very unusual to have this number of price rises, especially at this time of year, because processors do not want to push volumes up as we approach the spring flush,” he added.

But he said traders do not seem to be worrying about extra milk because of a potential export market to southern Ireland.

“They’ve had a bad winter, which has resulted in a 20% drop in milk produced between October and January compared with last year,” he said.

“If that downward spiral continues, the Stranraer ports could get fairly busy.”

ON THE UP: Milk prices are still rising but the increases are smaller than last month.