UK Milk Prices

In the UK, the range in prices paid from the top of the market to the bottom seems to be wider than ever. All dairy farmers are not equal.

Some dairy farmers are still being paid over 30ppl, including those who supply M&S (at over 31ppl) and a handful of others. Meanwhile some milk producers will be suffering extreme hardship on milk prices below 25ppl, including some Meadow Foods suppliers (who are on 22ppl if they are in Cumbria or South Wales – for their ‘A’ milk), and Pensworth, who are also languishing below 23ppl.

It is plainly just about impossible to make money at these prices. Even more galling for those farmers is that it is – clearly – impossible to find another buyer for the milk. And definitely not at a more economic price of (say) 27 – 30ppl. So, assuming you want to stay in milk, what can be done?

Cost reduction will not be enough to turn a very low milk price contract into a profitable one on its own. You may be able to add a bit of value to some of the milk you produce on farm, but this is definitely not easy. Yoghurt and cheese making will not always pay and installing a milk vending machine is not a certain pathway to profit.

Capital will be required, but as some funds are available now (through the Government’s emergency schemes) and interest rates are low, could this be the time to try to improve your own milk price by dint of your own endeavours?

If you are interested in this, seek out good advice and guidance first. Contact Charles at charlesholt@fcgagric.com or your local FCG Office to talk finance, grants and a plan.

Posted in Business Management, Dairy & Forage, Lincoln.