First Milk is raising its milk price from 1 September by 0.5p/litre, taking its standard litre liquid price to 28.5p/litre (4% butterfat, 3.3% protein).
The increase takes the co-op’s manufacturing standard litre (4.2% butterfat and 3.4% protein) to 29.47p/litre.
“We appreciate the additional costs that members are experiencing due to the adverse weather conditions,” said Jim Baird, farmer director and vice chairman.
“Whilst there continues to be conflicting messages on the overall market direction, we remain focused on growing our business and passing the benefits of this back to members,” added Mr Baird.
The market is very difficult to read – UK production is growing slowly but on the back of much winter feed already being fed. It remains to be seen whether the rise can be sustained at current higher feed prices and into the winter.
The next price announcement will be from Muller by the end of tomorrow (31 August), giving one month’s notice of its October price.
Dairy market analysis from Peter Meehan, INTL FCStone
Volatility remained high in global dairy markets over the past week.
While European spot skim milk powder (SMP) and butter prices edged higher again last week, futures price activity was more mixed on favourable weather across much of Europe, easing concerns over milk supplies.
On the spot market, European SMP gained a further 4% last week, climbing to £1,457/t. European spot butter prices saw more moderate gains, increasing by 0.5% to £4,990/t.
Futures markets have been more mixed, with EEX butter futures’ September to March contracts down sharply, falling by 5.6%. SMP futures meanwhile saw prices for October to December move down by 1% and January-March 2019 up 0.9%.
Despite the modest milk production numbers for July coming out of the Netherlands (-1.2%) and the US (+0.4%) over the past week and very strong export numbers out of New Zealand for July, futures prices struggled to find support.
Last week’s GDT auction also did little to support market prices as it saw its fifth move lower in six events and 10th move lower in the last 13, events with the overall index dropping by 3.6%. Fats, in the form of butter and anhydrous milk fat, drove the decline.