UK milk price and production both dipped in April

Both the average UK farmgate milk price and milk production for April 2016 fell compared to the corresponding month last year, the latest figures from DEFRA show.

For April, the UK average farmgate milk price was 21.59p/L (28.33c/L), which DEFRA has said represents a 3.4% (0.77p/L or a 1.01c/L in euro terms) decrease on March 2016.

This latest milk price drop continues the downward trend seen since November 2013.

UK milk production for April decreased 0.8% on the previous month (March) to 1249m litres, which is a 3.4% decrease on the same period last year, according to the DEFRA figures.

The Department has said that this has contributed to an abundance of supply in the market leading to the falls in milk price.

Recent years have shown increased production between February and May in line with the spring flush, which brings increased volumes.

However, DEFRA has said that April 2016 production has not followed the trend where volumes have decreased by 9.86m litres compared to March.

Last week, UK farmers supplying milk to Arla were told that the co-op would be cutting its milk price for June supplies of milk by 1.3c/kg.

When applied to the UK standard litre it equates to a reduction of one pence, taking the UK standard litre to 19.12p/L (24.93c/L) for June.

Arla also cut its price for May supplies of milk in April by 0.75p/l (0.95c/L) and farmers supplying the co-op also received a milk price cut for April of 0.75p/L (0.95c/L).

According to Arla, the market continues to be impacted by the global imbalance between milk supply and demand.

Currently, it says that commodity stocks are high and the market is extremely competitive which is continuing to generate further downward pressure on prices.

Arla Foods amba Farmer Board Director, Johnnie Russell, said that recent data suggests that the global growth in milk production is levelling off, which may lead to volumes stabilising later in the year.

“However, it is too early to predict whether this trend will continue over the coming months.”