Positive moves still on the cards for farmgate prices

Published 28 June 18

While increases in product prices slowed in June, the overall market value for milk increased. This was mostly due to firm cheese markets, and a continued shortage of fresh SMP. With increases for both AMPE and MCVE, the Milk Market Value (MMV)1 increased by 0.4ppl between May and June.

Historically, movements in the MMV are reflected in farmgate price changes three months later, leading to an expectation of positive movements in farmgate prices into September. Recent price announcements reflect this, with many buyers increasing milk prices through the summer months on the back of the rising value of milk through the spring.

Projected Farmgate Price Changes Table

It is important to note that the figures provide an indication of the direction and size of expected milk price movements. Differences in the timing and size of price changes by individual milk buyers will arise due to conditions in the markets in which milk buyers operate, as well as the mechanism they use to set the milk price.

1 Milk Market Value is a weighted average of AMPE and MCVE on a 20:80 basis.