DairyCo
Welcome to DairyCo
News Archive
- January 2011
- December 2010
- Promotions and price cuts - the retail market
- Farmgate price well below market returns in 2010
- Record high for feed wheat
- Input costs increasing faster than farmgate price
- Tesco to extend dedicated milk pool
- The Farm Behind the Food resource
- Gap between farmgate and AMPE narrows
- Panorama surprised when ex- dairy farmer gives thumbs up to ‘Mega Dairy’
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- March 2009
- September 2008
- August 2008
- June 2008
- May 2008
- April 2008
- 2007
Gap between farmgate and AMPE narrows
Published 9 December 10
The UK average farmgate price rose by 0.37ppl to 25.62ppl in October, with seasonality bonuses boosting prices as milk production headed towards the seasonal trough. This rise has pushed the average farmgate price to its highest level since December 2008.
The rise coincides with a pre-Christmas dip for some dairy commodity prices. On UK wholesale markets in November, butter prices declined by 6% to £3,050 a tonne and SMP fell by 4% to £1,870 a tonne. This can partly be attributed to UK milk production being buoyant this year with cumulative supplies running nearly 300 million litres (3.9%) ahead of last year.
The fall in butter and powder prices has pushed down the AMPE indicator by 1.7ppl to 28.0ppl. This means the gap between the average farmgate price and AMPE has narrowed to 2.4ppl.
In context
With no milk buyers on the DairyCo league table an-nouncing price increases in November or December the narrowing of the gap between AMPE and farmgate prices could be temporary. Turning to the wholesale mar-kets, prices usually slip over the holiday period and into January, although analysts are uncertain on the direction the UK market will take after this. On a positive note, MCVE stood at 29.55ppl in November, 1.55ppl more than AMPE suggesting cheese returns are still strong.