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MILK ANALYSIS
Defra price on course to top 32p
The latest o cial Defra milk price for August was 31.24ppl at 4.09% fat and 3.3% protein, and 30.5p when corrected for constituents back to a standard 4% fat and 3.3% protein standard litre. e latest estimated nonaligned price for October has just topped 30p.
During the year, the Defra price has averaged 1.3p over the nonaligned average, which means that by October or November, the Defra price should be more than 32p. e gap between aligned and non-aligned prices is, however, rising again, thanks to very strong milk price increases for aligned pools. e gap between aligned and non-aligned prices is now more than 2ppl for the rst time since March, having dropped to a di erential of 1.3p in June.
Average aligned vs. non-aligned prices (ppl)
35 34 33 32 31 30 29 28 27 26 25
Jan 19 Note: Includes assessment of aligned scaleback.
Average aligned price Average non-aligned price
Mar May Jul Sept Nov Jan 20 Mar May Jul Sept Nov Jan 21 Mar May Jul Sept Nov
EU prices soar as butter nudges £4,000 and cream £1.90
JEU and UK commodity prices surged in the week of Dairy Farmer going to press, skyrocketing to levels last seen back in 2014 for some commodities.
In the first week of October, butter was at £3,450, at the start of the second week it was £3,600, by the mid-week of that week it was £3,700 and by the end some traders would not even sell for the equivalent of £3,950 or even £4,000.
Cream
Cream in the UK was anything between the mid£1.80/kg into the £1.90s, but was still trailing the EU, which was at £2.15/kg to £2.20 equivalent.
Converting the EU and UK prices into a farmgate AMPE price puts returns at about 33p after transport and a processor margin. The butter and SMP futures are also riding high, and resulting in farmgate equivalent prices of about 33p.
Cheddar has also started to rise on the back of the market positivity, having been stuck at £3,000 for months.
It is now at £3,100/tonne for mild, with many sellers saying they would not sell for anything less than £3,250/t on the back of a very strong curd price, and strong Edam and Gouda prices.
The latest official Defra milk price for August was 30.5p for a standard litre.
AMPE and MCVE top 33p
JThe latest AMPE figure for September is 33.85p, after 2ppl for transport but with no processor margin, which is up 1.75p on August, with MCVE at 32.43p after transport, up nearly 1p on last month.
These prices are prior to the recent surge in commodity prices, however. If we take current prices then AMPE rises to 34.5p after transport but without a processor margin, and MCVE increases to 33.3p.
UFU index touches 33p
JThe Ulster Farmers’ Union (UFU) Milk Price Index (MPI), which estimates the returns it thinks farmers should be getting on the back of current commodity values, has touched the 33p threshold for the first time since August 2017.
The UFU also says the MPI has averaged 31.57ppl for 2021, which is ‘the most sustainable level in the history of the index’.
But it warns that better returns at the farm gate are being countered by rising input prices, with prices expected to carry on rising as whole energy costs getting factored into farm accounts.
With Northern Ireland milk prices being set this week, the UFU are calling on processors to factor in the rising dairy commodity returns to the base milk price to ‘relieve the price pressure on farms’.
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