FMP is AHDB’s market indicator for future milk prices, based on AMPE and futures contracts for butter and SMP. The table below shows that the price predicted by this analysis was down for the period to December 2019, but it is now back up for the months all the way to April 2020. The reason is simply that – again – forward prices for both butter and SMP are a bit stronger on the futures markets. So, the table is looking a bit more encouraging again.
As always, the absolute figures must not be used as predictions, but just as a guide to general trends. Note that the price in ppl is my estimate, not that of AHDB. It is based on an exchange rate of €1=89p. (Clearly the £ weakened from this, but is now stronger again, but I keep it stable for this purpose). If one used a current exchange rate of around €1=85p, the FMPE figure would be about 32.2ppl, not so good.
Remember that 2ppl (approx) needs deducting for transport and other costs, from any AMPE based price. This still leaves a gap between the current farmgate milk price and such calculated theoretical milk prices, and just confirms that it is really the trend one should look at, rather than the figures themselves.
Contact Charles at firstname.lastname@example.org or your local FCG office, to discuss milk price in more detail.