Another round of brutal milk price cuts has continued to put pressure on producer margins.
Arla has dropped its May conventional manufacturing milk price by 2.65ppl to 36.99ppl, and its liquid milk price is down 2.54ppl to 35.54ppl. These prices are now more than 14 per cent lower than a year ago and represent a drop of almost 15ppl since the beginning of 2023.
Arlas director of agriculture Paul Savage said: Increasing milk volume and a sustained decline in shopper spending continues to put pressure on the farmgate milk price.
But farmer director Arthur Fearnall offered a glimmer of hope to producers, saying the market is changeable and moving towards stabilisation as it approaches balance.
Freshways standard litre milk price for June is down 3ppl to 38ppl.
Managing director Bali Nijjar highlighted a reduction in demand from certain key markets, creating an oversupply of dairy products and putting downward pressure on prices.
In addition, we have had added pressures as we have seen the retail price of milk in the major multiples decrease, he said.
Muller bucked the trend, holding its price for June at 40ppl, including the 1ppl Muller Advantage premium, which is paid quarterly in arrears.
Cheesemaker Barbers held its June standard milk price at 38ppl, stating that with the market finely balanced it did not want to change its price until a clearer picture of supply emerged after the spring flush. It added the cold and wet spring had impacted production and there was a more stable global milk price.
AHDB lead dairy analyst Susie Stannard, on the other hand, was not convinced the market had stabilised yet.
Data showed that UK wholesale prices fell in April, with butter and mild cheddar prices down three per cent, and skimmed milk prices down nine per cent, she said.
This has led to an eight per cent drop in the Actual Milk Price Equivalent (AMPE) to 31.8ppl in April, she said, and a four per cent drop in the Milk for Cheese Value Equivalent (MCVE) price to 37.6ppl.
Consumer demand has come under pressure as shoppers try and save money, with some evidence of shrinkflation, where retailers sell a smaller pack at the same price.
Ms Stannard did think this years flush would not be a large one, which could limit production and tighten the market.
