Muller commits to 29p/litre until March

UK dairy processor Muller has frozen farmgate milk prices for February.

The price hold means the milk buyer’s 700 Muller Direct farmers will continue to receive 29p/litre for standard litres at 4% butterfat and 3.3% protein.

Muller’s Christmas Eve announcement followed a 5% (1.5p/litre) price cut for January volumes.

See also: Model dairy farm: Prospects for 2018

Arla’s January milk price took a similar hit, falling by 1.3p to 31p/litre for manufacturing volumes at 4.2% protein, 3.3% butterfat.

This drop would have been more severe were it not for a positive exchange rate and currency balancing funds from UK Arla Farmers (UKAF), with a combined positive value of 0.85p/litre.

Wholesale falls

Farmgate price reductions have followed across-the-board drops in UK dairy wholesale prices.

The average prices for bulk cream, butter, skim milk powder (SMP) and mild cheddar for December were 14%, 11%, 3% and 8% down on the month respectively, according to AHDB Dairy.

Bulk cream averaged £1,800/t for December 2017, 37% below the record highs of August last year.

Butter has also seen its value drop by more than a third across the same five-month period, ending the year with an average price of £4,000/t.

Tumbling wholesale prices have seen dairy market indicators Actual Milk Price Equivalent (AMPE) and Milk for Cheese Value Equivalent (MCVE) fall for the fourth month in succession.

AMPE stood at 26.4p/litre for December 2017, 2.8p/litre below the previous month and 4.6p/litre behind the same month a year ago.

There were similar drops for MCVE, which fell by 3p/litre in December, leaving the indicator 1.6p/litre behind the final month in 2016.