Milk price changes
Updated 5 May 2022
The latest publicly announced milk price changes as reported by the processors.
The upwards march goes on, with farmgate milk prices announcements for May pushing most prices reported on the AHDB league table near or above the 40ppl mark. Those farmers supplying higher solids (above the 4.1% butterfat and 3.35% protein standard) will be seeing payments even higher than that.
Normally, changes to farmgate milk prices are triggered by improved market returns, although with a lag of three to four months as manufacturers renegotiate prices. These are anything but ‘normal times’ however, and it seems that trigger has changed. Currently, it seems milk prices are being adjusted to support farmer cash flows as they struggle with rapidly rising input costs, with the hope of stemming further drops in milk production.
Across March and April, milk prices increased on average by 2.7ppl, bringing the total increase from the start of the year to 5.4ppl. Despite this, and announcements of further increases for May, GB milk production remained low through March and April, running around 3% below 2021 volumes.
The price increases announced for May ranged from 0.75ppl to 4.50ppl, with almost all contracts on the AHDB league table recording a price increase for the month.
Many contracts saw price increases in the region of 3.0ppl to 3.5ppl. The exceptions were Saputo who increased its price by 0.75ppl, and Wensleydale Creameries have announced an increase of 2.58ppl. Meadow Foods announced an increase of 4.5ppl, while Pattemores, Grahams and Freshways will all increase by 4.0ppl. Arla UK members will receive an additional 3.58ppl while its direct suppliers will get 3.77ppl more in May. Barbers Cheesemakers had originally announced a 2.0ppl increase, although this has been revised up to 3.25ppl.
Price increases on aligned liquid contracts were somewhat smaller, ranging from 0.88ppl to 2.14ppl. For Tesco, there was a further 2.04ppl increase in May on top of the 4.64ppl increase in April, with monthly reviews to take place going forward. Sainsbury’s suppliers will receive an increase of 0.88ppl in May following its 4.72ppl increase in April. The Cooperative price moved up by 2.14ppl in May.
The momentum has been carried forward into June, with some buyers already setting out their stall. Those announcing for June include Barbers (+2.75ppl), Crediton (+2.25ppl), Saputo (+5.0ppl), First Milk (+2.0ppl), Meadow Foods (+1.25), South Caernarfon Creameries (+1.75ppl) and Wyke Farms (+2.4ppl). There will also be a 1.5ppl increase for the Müller non-aligned milk pool. With both Sainsburys and Tesco now reviewing prices monthly, suppliers in these milk pools will receive +0.94ppl and +0.75ppl respectively in June.
Freshways have come out with a guaranteed 4.0ppl increase for July following a similar increase in May, although they have indicated an aim to bring their standard litre up to 45ppl.
Announced milk price changes to May 2022 can be downloaded below.
The milk price changes may not be fully reflected in the AHDB League Table.
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