Milk processors inflict further price cuts on producers

An oversupplied milk market continues to put pressure on farmgate prices, with processors making further cuts into the new year.

GB milk volumes are still tracking at roughly 5% above last year’s levels, although there was a slight reduction in output in the past week with the daily average falling slightly to 33.94m litres.

Dairy farmers supplying Arla will see their conventional milk price drop by 3.5p/litre in December to 39.21p/litre for a standard manufacturing litre.

See also: Dairy sector plans ahead to manage excess milk volumes

The co-operative says supplies continue to increase significantly, both globally and in the EU, whilst demand from retail and industry is stable.

Looking forward, it suggests that large milk volumes are likely to continue negatively impacting the outlook for prices.

Meanwhile, Arla’s organic milk price will hold at 57.95p/litre.

Milk processor Muller will pay its producers 38.5p/litre in January for a standard liquid litre.

This represents a 1.5p/litre price cut on the previous month and puts its 4p/litre below January 2025 levels.

Market pressure

Richard Collins, agriculture director at Muller, said: “Unfortunately we can’t ignore the continued pressure that is evident across dairy markets.

“We’re seeing market price reductions and daily collection volumes are still significantly higher than they were last year.”

Freshways has confirmed its standard milk price will fall by 3p/litre in January to 31p/litre.

In a letter sent to producers, Freshways managing director Bali Nijjar said: “Milk and cream prices continue with their unprecedented decline, driven by oversupply and reduced demand.

“Spot milk volumes remain highly competitive, trading well below 20p/litre, and the outlook for late December remains concerning.”