Agribusiness News December 2024 – Milk

Milk production data

Milk production is full steam ahead, with volumes significantly ahead of this time last year. GB October deliveries were 2.6% more than October last year (1,029 mlitres versus 1,003 mlitres).  This increase has been attributed to better grass growth and weather conditions, more autumn block calving herds and a favourable milk price to feed price ratio. For the w/e 16^th November, daily deliveries averaged 33.98 mlitres, up 0.5% on the previous week and 4.9% more than the same week last year. The Defra UK milk volume for October was 1,217 mlitres, 64 mlitres more than September and 2.8% up on the October 2023 volume.

 

Farm-gate prices

The Defra farm-gate milk price for October was 45.17ppl, up 2ppl from the previous month. Despite milk volumes still rising and some negative movement in commodity prices, milk price rises for December are still being seen from some of the main Scottish milk buyers.

Milk Prices for Nov/Dec 2024 Scotland		Standard Ltr ppl
First Milk2		Dec	45.35
Müller - Müller Direct - Scotland 1, 3		Dec	42.25
Grahams1		Nov	40
Arla Farmers2		Nov	48.54
Lactalis / Fresh Milk Co.2		Nov	44.11
1	Liquid standard litre – annual av. milk price based on supplying 1m litres at 4.0% butterfat, 3.3% protein, bactoscan = 30, SCC = 200 unless stated otherwise.
2	Manufacturing standard litre - annual av. milk price based on supplying 1m litres at 4.2% butterfat, 3.4% protein, bactoscan = 30, SCC = 200 unless stated otherwise.
3	Includes 1.00ppl Müller Direct Premium. Haulage deducted depending on band for 2023 vs 2021 litres, ranging from -0.25 to -0.85ppl.

 

Dairy commodities & market indicators

The wholesale markets for dairy commodities showed little change from October in the average monthly November price, with only butter up 2%, no change to SMP, and cream and mild cheddar down 1% and 3% respectively. Stocks of butter are still tight despite higher milk volumes, but there is still very limited processing of cream into butter due to good export premiums for cream. Butter demand remains strong both for domestic retail and export. Cheese stocks are also tight, with trading activity fairly quiet. Buyers are showing little interest in forward purchases, only buying if required and there is little chance of any discounts from sellers with milk prices still rising. Given the higher butter price in November, AMPE was up 0.73ppl, but with cheddar back on average by £110/t, not surprisingly MCVE fell 1.09ppl from October. The Milk Market Value indicator fell 0.73ppl to 45.64ppl for November, the first negative movement since April.

UK dairy commodity prices (£/tonne)	Nov	Oct	May
	2024	2024	2024
Butter	6,630	6,500	5,080
Skim Milk Powder (SMP)	2,100	2,090	2,010
Bulk Cream	3,059	3,096	2,104
Mild Cheddar	4,190	4,300	3,540

UK milk price equivalents (ppl)	Nov	Oct	May
	2024	2024	2024
AMPE	46.22	45.49	37.08
MCVE	45.5	46.59	36.4

© AHDB [2024].  All rights reserved.

 

The two GDT auctions that took place in November resulted in positive movements in price index, up 4.8% and then 1.9% on the 19^th of the month, although the cheese mozzarella and cheddar were both down by 6.6% and 3.1% respectively at the latest auction.

 

New export market for Scottish milk

Fresh, pasteurised Scottish milk could soon be on its way to Morocco. The Scottish Dairy Growth Board has been in discussions with one of Morocco’s biggest agricultural and food processing businesses to supply the country with fresh pasteurised milk that will be processed into new premium dairy products and help meet Morocco’s growing demand for dairy products, in a country where water scarcity constrains its own milk supply. Trade is expected to start in early 2026, with a target of £150 million worth of fresh pasteurised milk being exported from Scotland annually by 2030.

Further markets are also being explored in other countries, including Tunisia, Egypt, Algeria and the Middle East. In order to fulfil this trade agreement with Morocco, investment will be required in a pasteurisation and milk concentration plant in Scotland so that the milk is more competitively priced for shipping and has a longer shelf life. The milk will be shipped from Grangemouth to Casablanca via Antwerp, an already established shipping route.

Arla farmers to trial Bovaer

Arla has announced a partnership with Morrison’ Aldi and Tesco to trial the methane reducing additive Bovaer across 30 of its farmer suppliers. Bovaer has been proven to reduce methane emissions from dairy cattle by around 27%. It is hoped that the results of the trial will encourage more farmers to use the product and thereby helping Arla meets its 30% reduction target of CO₂ emissions by 2030.

 

Lorna MacPherson, lorna.macpherson@sac.co.uk