Dairy market values expected to remain stable

Wednesday, 27 January 2021

By Bronwyn Magee

The most recent projected milk price changes suggest that, on average, farmgate milk prices could remain stable at least for the first quarter of 2021, with the GB average expected to move +0.2ppl between January and April 2021.

This is based on recent movements in the wholesale market which led to a small increase in the Milk Market Value (MMV) in January. Higher prices of both butter and SMP saw the AMPE lift by 4% (1.05ppl) in January. Meanwhile, the MCVE lifted marginally (0.13ppl) due to small increases in the value of whey resulting from currency fluctuations. As a result, the MMV in January was up 0.3ppl on December 2020. This indicates that for those farmgate prices linked to market returns could see a small increase over the next 3 months.

It should be noted this projection is based on previous movements in the dairy market and gives a general guide to the pressure on farmgate prices based solely on market prices. Factors such as shifts in demand due to coronavirus and trade implications resulting from EU Exit will have differing impacts for processors. The projection also excludes seasonality payments, and therefore does not reflect the individual prices paid for milk.

Bronwyn Magee

Trainee Analyst

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