Projected farmgate milk price changes

Updated 25 March 2025

These projections indicate the expected movements in farmgate milk prices for the next three months, based on movements in the dairy markets.

• UK wholesale price movements were mixed in March as some buyers held off from the market, waiting for the spring flush.
• Average prices for butter strengthened 3% while SMP fell marginally month on month. AMPE subsequently moved up 0.7p to 42.7ppl.
• MCVE also moved upwards, by 0.8p to 44.1ppl driven by growth in mild cheddar prices (2%).
• These price changes resulted in the market value of milk (MMV) lifting to 43.8ppl in March.
• Wholesale markets are likely to continue supporting farmgate milk prices once we pass the peak spring production.
• The market indicators have been updated to reflect returns based on cost data up to Q3 2024 and will be updated with Q4 2024 data in April 2025.

• The projected change is based on the strong link found between movements in the value returned to manufacturers from the market (MMV) and movements in farmgate milk prices.
• On average, it was found that a 1ppl change in the MMV will lead to around a 0.5ppl change in the overall GB average milk price, generally three months’ later.
• Differences will arise due to the markets in which milk buyers operate as well as the mechanism they use to set the milk price. These will impact the timing of price movements as well as the size of the change.
• Other factors which are likely to impact milk prices will be the degree of competition for milk in the market, changes to available processing capacity, import competition and contract negotiations.
• [1] The Milk Market Value (MMV) is a weighted average of AMPE and MCVE on a 20:80 basis. This was found to be the best predictor of movements in farmgate prices based on historical data. The analysis was done excluding prices paid on retailer-aligned contracts. The impact of the adjustment of AMPE and MCVE following the 2020 review has been accounted for, and the model updated.