UK Milk Prices Rise in September Amid Tightening Supplies and Increased Demand
Source: DairyNews.today
Dairy farmers in the UK are set to benefit from rising farmgate milk prices this September, driven by a combination of increasing wholesale demand and tightening milk supplies. Since the start of 2024, milk prices have surged by more than 6p per litre, reflecting the dairy processors' heightened demand for milk volumes as the autumn season approaches.
This demand has been further supported by a 5.5% rise in wholesale dairy values at the GlobalDairyTrade auction on August 20, with butter and milk powders experiencing significant price gains.
The increase in demand comes at a time when UK milk supplies are shrinking. Since the spring flush, milk deliveries have tightened, averaging less than 32 million litres a day towards the end of August—a 0.9% decrease compared to the same period last year. This decline in supply has reinforced returns for processors, prompting several companies to raise prices.
In response, Arla, one of the UK's leading dairy processors, has announced an increase in its milk price by 0.89p per litre, bringing the price for a standard manufacturing litre to 43.33p in September. Arthur Fearnall, board director of Arla Foods amba, explained: “Commodity markets are increasing, driven by fat-heavy products, especially butter. The strong demand, coupled with low seasonal milk intake and limited fat availability in the EU, is driving the price hike. The overall outlook remains slightly positive."
As milk supplies continue to tighten, dairy farmers are likely to see further benefits from these market dynamics, especially as demand for key dairy products such as butter, cream, and cheese remains strong heading into the autumn months.
The increase in demand comes at a time when UK milk supplies are shrinking. Since the spring flush, milk deliveries have tightened, averaging less than 32 million litres a day towards the end of August—a 0.9% decrease compared to the same period last year. This decline in supply has reinforced returns for processors, prompting several companies to raise prices.
In response, Arla, one of the UK's leading dairy processors, has announced an increase in its milk price by 0.89p per litre, bringing the price for a standard manufacturing litre to 43.33p in September. Arthur Fearnall, board director of Arla Foods amba, explained: “Commodity markets are increasing, driven by fat-heavy products, especially butter. The strong demand, coupled with low seasonal milk intake and limited fat availability in the EU, is driving the price hike. The overall outlook remains slightly positive."
As milk supplies continue to tighten, dairy farmers are likely to see further benefits from these market dynamics, especially as demand for key dairy products such as butter, cream, and cheese remains strong heading into the autumn months.