Farmgate price well below market returns in 2010

Published 29 December 10

Most milk buyers increased their price in 2010, but to different degrees. Generally, cheese contracts saw larger rises with, for instance, South Caernarfon Creameries raising its price by 3.1ppl during 2010; while liquid contracts experienced some modest gains with, for example, the Wiseman Partnership contract getting a 0.4ppl increase over the year.

Latest figures show that the average October 10 Defra farmgate price for the UK stood at 25.62ppl which is 1.18ppl higher than in October 09. DairyCo estimates that the UK Defra farmgate price will average around 24.7ppl for 2010 compared to 23.9ppl for 2009, a 0.8ppl increase.

In contrast to returns from the wholesale market, the graph below shows that the farmgate price stood well below AMPE and MCVE for most of 2010. It is estimated that on average for 2010 the farmgate price will be 3.6ppl and 4.7ppl below AMPE and MCVE respectively.

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