Defra and AHDB publish the farmgate milk price on a monthly basis. The peak monthly price reached recently was 31.59ppl last November 2018. However, for business planning and investment appraisal, I always regard the five-year rolling milk price as the most important figure to consider.
As I predicted, this five-year figure has now fallen below the bottom of its usual range, from 27.0 to 28.5 ppl. It is now at 26.90ppl, which is low, and it will go lower. It will almost certainly drop to around 26.85ppl next month, and it will drop further up to around Christmas. This is simply because the summer 2014 prices were very strong at around 30ppl, and these will of course drop off the figures to be averaged.
So, when you are budgeting long term and considering whether or not to make significant investments in your dairy farm business, you need to consider this in your income calculations. What milk price can you safely assume?
Contact Charles at firstname.lastname@example.org or your local FCG office, to discuss milk prices.