A Muller truck

The UK’s second largest dairy processor, Muller, has held its standard liquid price for July.

Non-aligned producers will receive 26.19p/litre from the start of next month, before the supplement paid by retailers Aldi, Lidl and Morrisons is applied.

The processor confirmed the supplement was worth 0.275p/litre to producers in May, which represented a fall in value of more than 60% since February.

See also: Unprecedented markets justify milk price rise

The price freeze follows a 0.5p/litre drop for June, as well as soaring domestic and global dairy commodity prices.

UK wholesale values for butter and cream are currently at record levels and still climbing, 112% and 128% above levels seen 12 months ago.

Mild cheddar prices are also 70% higher than they were in May 2016, at £2,975/t. 

“Our milk price is competitive and stable, reflecting our focus on adding value to the milk we buy,” said a Muller spokesman.

 

“This means we are less exposed to violent swings in commodity markets because of the products we sell and the contracts we have in place.”

He added: “We fully understand that farmer expectations are increasing and it is clear that the market environment and outlook is looking positive.

“We are confident this will result in higher milk prices.”

Futures market 

The spokesman also confirmed Muller hoped to be in a position to engage producers over its new futures market tool in July and August.

“Farmers have been very enthusiastic about this option, which aims to reduce their exposure to risk and volatility in the market.

“An awful lot of work is going in to make sure the contract proposition ready for farmers shortly.”

Farmers Weekly understand at least some of the processor’s 1,900 producers, which includes the 650 ex-Direct Milk DPO members, will be actively using the futures tool by the end of the year.