Milk prices buck the seasonal dip

The average UK farmgate milk price rose to 26.08p/litre in February 2011, up 0.36p/litre from the previous month and almost 2p/litre ahead of last year, according to DairyCo.

Tesco returned to the top of the milk price league table, following a 0.32p/litre rise in its February price. The month saw 20 price increases, mostly confined to cheese and manufacturing contracts, including a 1p/litre rise from Belton, Barbers and Dairy Crest Davidstow.

March saw 18 increases, mostly for liquid milk contracts, including a 1p/litre rise for Grahams Dairies, Payne’s, and Dairy Crest’s non-aligned pool.

So far 17 processors have announced April price rises, including Milk Link, Wiseman, Wyke, Meadow Foods and Saputo. Farmers supplying Tesco’s sustainable dairy group will receive an extra 1.28p/litre, bringing its average to 29.78p/litre, including the 0.5p/litre Promar supplement.

Other processors’ April price rises are less straightforward. Only 0.74p/litre of Dairy Crest’s non-aligned price increase will be added to the base milk price, with the remainder applying to high butterfat milk. Arla’s 2p/litre rise will only fully benefit farmers supplying the top-quality band of milk, while 0.5p/litre of First Milk’s increase will be tied to a production bonus.