Milk to feed price ratio tracking below 5-year average

Published 25 July 18

After hitting a record high in October 2017, the milk to feed price ratio (MFPR) has been in decline ever since. The farmgate milk price dropped off at the start of the year; meanwhile higher straight prices have resulted in concentrate prices creeping up. Combined, these resulted in the MFPR in March dropping below the 5-year average for the first time since October 2016.

Since March, the MFPR has remained relatively level around 1.23. Concentrate prices are estimated to have increased by around £9/tonne since March to £230*/ tonne in July. The fact that the MFPR has remained relatively stable during this period indicates that recent increases in farmgate milk prices are only just compensating for rising feed costs. 

Calculated MFPR graph

* AHDB’s milk to feed price ratio (MFPR) has been relaunched to provide more up to date information about the relationship between farmgate and concentrate prices.

Up to now, AHDB has used concentrate prices quoted by Kingshay and Promar and farmgate milk prices from Defra in the MFPR calculation. However, these prices can be 2-3 months out-of-date by the time they are available. Going forward, as well as quoting these prices, AHDB will also quote a theoretical price. This new calculated MFPR is based on projected farmgate price movements and calculated concentrate prices.

Calculated MFPR table

The ratio will vary greatly from farm-to-farm depending on milk price achieved and type of feed used. The ratio should only be used as a guide to the cost-revenue relationship in the country. For a more detailed indication of production costs click here.