Milk quality boost to milk prices in October

Thursday, 12 December 2019

By Chris Gooderham

Defra’s UK average milk price paid in October was provisionally put at 29.35 pence per litre (ppl), down slightly on September. However, with three-quarters of quoted standard litre prices in our milk price calculator sitting below 29.35ppl, how can the overall average be so high?

Our calculator includes milk prices for some 75% of the milk collected in the country. If milk quality had been at our standard litre of milk (4.07% butterfat and 3.30% protein) in October the estimated weighted average price would have been 28.3ppl. This included seasonal bonuses for a few milk buyers, which added an estimated 0.3ppl to the overall average. However, this did not take into consideration the continual high compositional quality of the milk being collected and paid for in the country.

Average butterfat and protein levels rose again in October, hitting 4.23% and 3.45% respectively. Our split of this between milk destined for different markets shows those paying for higher solids are receiving milk quality above the UK averages.

It is predominantly the additional solids that continue to boost the average milk price paid in the country. Based on our milk price calculator, the higher solids add another 1.0ppl to the average price paid in October compared with our standard litre. This would bring our estimate for October to 29.3ppl, in line with the Defra quote of 29.35ppl.

Chris Gooderham

Head of Market Specialists - Dairy & Livestock

Sign up for regular updates

You can subscribe to receive Dairy market news straight to your inbox. Simply fill in your contact details on our online form and select the information you wish to receive.

Visit the Keep in touch page