And on milk supply - national milk volumes, whilst strong last Autumn have dropped back, with AHDB data that total GB deliveries are only running 0.1% above the same week last year. I rightly understand that there is a lag between movements in wholesale prices and farmgate prices but it again looks like the downwards moves are quicker and deeper than the upward moves.
This needs to be improved with clear information given to farmers as to why the milk price is changing.”
Interestingly with Arla and Muller standard litre prices now falling below 28ppl the question now is will the retailers that committed to floor farmgate milk prices a few years ago reinstate this scheme. And will the milk buyers be asking for it?
On a positive note Muller is one of the only major milk buyers to offer farmers ways of managing some of the price risk themselves – through forward trading, and I understand that there are more announcements coming on this area soon. As an industry we do need to stop focusing on individual milk price changes and focus on the longer term future of the industry – finding new ways of managing milk price volatility is a must for the whole supply chain.