The increase follows a period of better returns from the cream market, (see table – PDF), and will take the standard litre price for around 900 direct suppliers to 24.3p/litre, before seasonality deductions.
NFU dairy board chairman Gwyn Jones said the time had come for other dairies to follow suit. “After suffering nothing but price cuts since the start of the year, this allows farmers to be slightly optimistic about where prices will go.”
But prospects for manufacturing milk remain subdued. Skimmed milk powder continues to flow into intervention stores around Europe, while world dairy markets are being challenged by subsidised exports from the USA. A further weakening of the US$ has also aided their export competitiveness.