High fat and protein push September prices up 1.3ppl

Wednesday, 13 November 2019

High milk solids into manufacturing products boosted average milk prices in September

It’s often difficult to marry up milk price changes quoted by companies based on standard litres, and the official average milk price paid in the UK, as quoted by Defra. September was no exception, with the Defra average put at 29.68ppl, up 0.88ppl on August, and ahead of the vast majority of “standard litre” prices quoted in our own milk price calculator. So, why the difference?

Part of the reason is that some milk buyers continue to offer seasonal incentives through the autumn to encourage more milk. However, by far the biggest impact comes from butterfat and protein levels.

UK fat and protein levels hit averages of 4.14% and 3.41% in September, the highest levels for both for at least ten years. But even the increase in the overall average doesn’t tell the whole story. In September, for the first time, we started to gather milk quality information split by end market. In other words, milk destined for the liquid market compared with milk being manufactured into other products where milk solids, particularly protein, are more important.

While still provisional, the results suggest that milk destined for the liquid market averaged around 4.0% butterfat and 3.3% protein. Whereas milk for the manufacturing industry hit 4.3% butterfat and a whopping 3.7% protein. It is predominantly these additional solids that have boosted average milk prices in the country. Based on our milk price calculator, the higher solids added 1.3 pence per litre to the UK average milk price in September compared with our standard litre levels of 4.07% and 3.30%.

Chris Gooderham

Head of Market Specialists - Dairy & Livestock

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