Milk price rise starts to filter through

Average UK farmgate milk prices increased by 0.38p/litre in October, to 24.43p/litre, according to DEFRA's latest report.

Northern Ireland enjoyed the largest rise of 2.23p/litre, while GB prices increased by just 0.12p/litre. "The differential between the GB and NI price has now fallen to 2.11p/litre, the smallest differential seen since February 2008," says DairyCo's Datum service.

"Historically farmgate prices rise between September and October due to changes in seasonality payments, as national milk production is falling at this time of the year. The NI market is more related to the commodity market, and with commodity prices rising significantly from September. This has impacted on the average NI farmgate milk price."

However, UK prices are still some 10.7%, or 2.93p/litre, below the same month last year. GB average prices are 3.24p/litre below October 2008, with Northern Ireland 1.02p/litre lower.

Meanwhile, monthly milk production fell by 3.7% between October and November, to 986m litres. That was slightly above November 2008, bringing cumulative production to 8634m litres - just 1m litres below the same period last year.

18 December 2009