Dairy farmers are set to receive higher farmgate prices for milk during September and October as wholesale demand for butter, cream, and cheese improves.
Prices have continued to rise throughout 2024 and have lifted by more than 6p/litre since the beginning of the year, with processors keen to secure milk volumes during autumn.
Nick Holt-Martyn, principal consultant at The Dairy Group, said: “Strong demand for butter and cream on the EU market is driving on to near record levels.”
Wholesale dairy values increased by 5.5% at the latest Global Dairy Trade auction on 20 August, with large price gains for butter and milk powders.
This increase in demand has coincided with dwindling milk supplies in the UK, and has helped to drive returns for processors.
Milk supplies have been tightening since the spring flush and UK milk deliveries averaged less than 32m litres a day towards the end of August, back by 0.9% on the same period last year.
Milk price moves
Arla has increased its milk price by 0.89p/litre to 43.33p/litre for a standard manufacturing litre in September.
Arla Foods amba board director Arthur Fearnall said: “Global milk supplies continue to be stable while retail sales continue to grow, albeit at a slightly slower pace.
“Commodity markets are increasing, driven by fat heavy products, especially butter. The increase is driven by strong demand and additionally fuelled by the low seasonal milk intake and limited availability of fat in the EU. The overall outlook is slightly positive.”
Muller will pay its producers an October price of 41.25p/litre, including its advantage premium.
Richard Collins, Muller’s head of agriculture said: “We’re pleased to see stability in the market and following an increase to our farmgate milk price in September of 1.25p/litre, we are in a position to increase it again by a further 1p/litre for October.
“We recognise the ongoing pressures on our supplying farmers and as always, we will continue to monitor supply and demand.”
Producers supplying Barbers Cheesemakers will receive 43.03p/litre for a standard manufacturing litre in October.
First Milk has announced it will increase its milk price by 0.6p/litre to 42.6p/litre for a standard manufacturing litre, including its members premium.
Mike Smith, First Milk vice-chairman and farmer director, said: “This is more welcome news for our members as they head into the autumn, following challenging on-farm conditions from spring and all through summer.”
Organic Herd has confirmed it will lift its organic milk price by 2p/litre from 1 October to 56p/litre.
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