After seeing the average GDT price index fall marginally at both events in August, the reverse has happened in September. The average price index rose by 0.3% at the beginning of the month and again by a further 0.9% at the event held on 19th September to average $3,368 per tonne. Whole Milk Powder (WMP) made up over half the product sold at the latest event and increased by 0.6%. By contrast Skimmed Milk Powder (SMP), which made up just under a quarter of the total products sold decreased by 1.2%. Fats continue to perform well and remain the dominant driving force behind the increase in the farmgate milk price. Anhydrous Milk Fat and Butter saw their price indices increase by 5.3% and 1.2% respectively.
Domestic production remains relatively tight, also helping to support the increase in the farmgate milk price. August delivery figures are not available until 28th September but, although July’s production was 1.8% more than for the same month in 2016, it was 6.4% less than that recorded in 2015. According to DEFRA, production for the period April to July is 1.3% more than for the same period in 2016 but 4.4% less than a couple of years ago. In addition, AHDB Dairy has estimated GB milk deliveries, have fallen by 13% between the middle of May and the middle of August, this is on a par with last year, but significantly it is more of a decline than the five-year average which shows a 10% drop over this period.
Increases in milk prices keep being announced, some of the most notable include below:
- Arla has announced an increase to its manufactured price by 1.5ppl per litre from 1st October and by 1.43ppl for its liquid suppliers
- First Milk increased its Septembers milk price by 1ppl for its Haverfordwest and Cumbria suppliers and by 1.1ppl for Midlands and Scotland suppliers.
- Muller, South Caernarfon, Wyke Farms, Graham’s Dairies and Meadow Foods have all announced a 1ppl increase as from 1st October.
Whilst these moves are all positive for producers, there is a sense that the market might be approaching its peak. The number of farmgate price increases being announced is starting to slow down, and there could be a relatively quiet period up to Christmas.