Consecutive milk price rises for Muller producers
UK dairy processor, Muller has increased its standard litre by 1.25p/litre from 1 July.
The price rise means the 700 Muller Direct producers will receive 28p/litre for milk with a constituent content of 4% butterfat and 3.3% protein.
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Strengthening dairy wholesale markets drove the change, which is the processor’s second consecutive upward price movement following a 0.75p/litre increase in June.
“Market returns are continuing to improve after a challenging period, and we are pleased to reflect this in higher milk prices, said Muller milk supply director, Rob Hutchison.
Mr Hutchison added despite global market volatility showing no signs of abating, Muller producers were embracing tools to help insulate themselves against the ups and downs of dairy markets.
“In practical terms our farmers now have the means by which they can continue to benefit from upsides in the farmgate milk market but they are now far better protected from the downturns thanks to innovations such as the Muller Direct fixed price contract and the futures contract option.
“Going forward, we intend to continue to develop innovative solutions which support our supply chain.”
Expert Analysis: Peter Meehan at INTL FCStone
European Dairy commodity futures prices continued their march higher over the past couple of weeks.
Strong demand and lower than anticipated milk collections across the EU throughout the spring-period are two of the drivers behind the price increases, despite improved milk fat and protein content for most of Europe’s big milk producers offsetting the reduced liquid milk collections.
The latest milk collection numbers for April are showing New Zealand, the US and Australia all saw increases compared with last year.
Spot European butter prices have now seen eight consecutive weeks of increases, moving up by 24% in that period.
Spot skim-milk powder (SMP) prices are also heading higher, posting seven weeks of gains on the bounce, up 19% in that period. SMP prices have remained firm on the back of very strong demand, with EU SMP exports for January-March up 8% on last year while SMP prices were unfazed by the EU Commission’s sale of 42,000t of intervention stocks last week.
With average UK farmgate milk prices posting four consecutive months of declines between December and March, the commodity price strength over recent weeks suggests farmgate milk prices may have bottomed-out, with milk price increases announced over the past seven days.