Further stability for milk prices as spring flush approaches
© Tim Scrivener Thousands of dairy farmers will see farmgate milk prices stand on again throughout April and May, as several major milk processors confirm price holds.
While wholesale dairy values are improving, prices remain lower on the year, and an oversupply of milk continues to weigh on the market.
GB daily milk deliveries are running at 2.2% above last year’s levels, with several days having already surpassed 37m litres.
See also: Muller puts more milk producers on 12 months’ notice
Processors are reportedly nearing maximum capacity, with milk production set to rise further ahead of the spring flush peak, which is expected in late April or early May.
Rabobank predicts that global dairy markets will tighten as farm margins come under pressure and supply growth cools, with output across the major exporting regions set to remain relatively flat in 2026.
The numbers
2.2% Annual increase in average GB daily milk deliveries in mid-March
£3,980/t UK wholesale butter price in March
37.35p/litre Actual Milk Price Equivalent in March
Emma Higgins, senior analyst at Rabobank, said: “This outlook is largely driven by softening supply growth in South America and Australia, as well as China.
“Milk production is also expected to decline by 0.9% this year in Europe, while the overall drop will be partly offset by the US, where farmer margins are supported by high beef prices, suggesting milk production growth will continue through this year.
“While the recent lift in global dairy prices is encouraging, sustained recovery will depend on how quickly exportable availability normalises and how demand evolves across Asia and the Middle East.”
Milk price holds
First Milk has confirmed it will hold its price for May at 30.75p/litre for a manufacturing litre.
Muller has also committed to standing on, with its producers receiving 34.5p/litre for a standard liquid litre in May, including the members’ advantage premium.
Barbers Cheesemakers will continue to pay its producers 32.05p/litre for a standard manufacturing litre in May. The Somerset-based firm has invested in additional milk storage to meet growing demand, with two new silos adding a combined capacity of 300,000 litres.
Arla has committed to holding its milk price for a manufacturing litre in April. However, after factoring in the quarterly currency exchange rate adjustment, it will lift very slightly to 34.07p/litre.
The processor says global milk supplies have stabilised at a high level, with plenty of supply across Europe, adding that prices are firming on commodity markets.
However, the organic dairy market has come under pressure with a growing imbalance between supply and demand, according to Arla.
Organic producers supplying Arla will receive a price cut of 1.76p litre and a headline price of 56.31p/litre in April.
Muller agreement
Milk processor Muller has reached an agreement with its dairy producer organisation, MMG Dairy Farmers, to make adjustments to contracts from 1 July.
Dairy producers supplying Muller will receive an ingredients-based price for any milk that exceeds production levels supplied in the same month of the previous year.
Richard Collins, agriculture director at Muller, told suppliers that the total amount of milk Muller was contracted to process for the UK market had changed.
“To ensure we manage our supply of raw milk responsibly and maintain a sustainable balance between milk intake and processing demand, we have no choice but to make adjustments to how we allocate milk into the UK market,” he said.
