AMPE and MCVE updated to reflect latest costs in Q3 2023

Wednesday, 24 January 2024

Processing costs for dairy products continued to ease in the third quarter of 2023, thereby increasing the value of AMPE and MCVE. These changes will be updated in our next publication on 25 January.

In Q3 2023, electricity and gas costs were down on the previous quarter, declining by 3.8% and 1.3% respectively. However, overall inflation (as measured by the Consumer Price Index) increased by 0.5% in Q3 compared to the previous quarter. Looking at the comparison with the same quarter in 2022, electricity and gas has declined by 4.7% and 7.5% respectively, while overall inflation rose 6.4% year on year.

The net impact of the latest quarterly cost declines is for the average processing costs within both AMPE and MCVE to edge slightly down versus Q2. AMPE costs are now 0.07ppl lower than the previous quarter and MCVE costs are on average 0.04ppl lower.

The fall in energy costs continue to be offset by an increase in overall inflation. In 2023 energy costs have softened, however they remain at historically high levels. When compared to average processing costs in Q3 2022, AMPE costs have increased by 0.1ppl and MCVE costs have increased by 0.3ppl year on year.

Please note that this latest update only reflects cost inflation to September 2023, including data revisions. Labour costs have been carried over from Q2 due to a delayed data publication from ONS. The next update will be in April 2024 following the ONS release of the 2023 Q4 cost indexes. A breakdown of the latest costs is given below:2023Q3 processing costs table

processing costs Q3 2023The new costs include changes in:

  • Energy costs based on the movement in the average prices of gas and electricity purchased by the manufacturing industry in GB as quoted by BEIS, up to Q3 2023.
  • Labour costs carried over from Q2, based on the movement in the unit labour cost for the whole economy as quoted by ONS – due to a delayed data release Q3 data was not available at the time of this publication.
  • Other costs based on the movement in inflation (CPI)from the 2020 update to Q3 2023.

 For further changes and to see how costs impact your own business, we offer an online spreadsheet that allows you to enter bespoke costs and milk quality into the calculations. This will then calculate unique indicators based on your own circumstances.


Image of staff member Soumya Behera

Soumya Behera

Senior Analyst (Dairy)

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