Intervention makes IMPE relevant again

Published 19 August 15

With UK dairy products now going into intervention, the Intervention Milk Price Equivalent (IMPE) becomes relevant for tracking domestic milk prices and is available on the AHDB Dairy website. IMPE 2014* represents returns from selling butter and SMP into intervention (when it is open) and therefore offers a way to track the minimum value of milk available to processors. 

As intervention prices can be viewed as minimum prices for butter and SMP, IMPE could be used as a way to track that ‘B’ prices paid on A&B contracts are in line with market values. It should only be used to compare trends and not absolute values, as not all manufacturers will sell to the same markets nor choose to put product into intervention.  For example, at times it may suit a business to sell on the spot market at a small discount to intervention prices in exchange for speedier payment.

*IMPE 2014 calculations have been amended to reflect changes to UK processor costs and yields identified in the 2014 AMPE/MCVE review.