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AMPE and MCVE updated to reflect latest costs in Q2 2024
Thursday, 24 October 2024
Processing costs for dairy products were subject to inflationary pressure in the second quarter of 2024, reducing the value of our market indicators AMPE and MCVE. These changes will be implemented in our latest publication on 25 October.
In Q2 2024, electricity declined by 4.8% and gas increased by 1.2% compared to the previous quarter. Overall inflation (as measured by the Consumer Price Index) also increased by 1.4% on the quarter.
The net impact of the latest quarterly cost increases is for the average processing costs within both AMPE and MCVE to edge up slightly on the quarter. Overall, AMPE costs are now 0.01ppl higher and MCVE costs are 0.05ppl higher than the previous quarter.
The main factor was the increase in gas prices and overall inflation on the quarter, which impacted the overall cost. However, the rising costs were offset by the decline in electricity prices. Energy prices continue to remain at historically high levels.
Note that this latest update only reflects inflation to June 2024, including data revisions. Labour costs have been carried over from Q1 due to a delayed data publication from the ONS. The next update will be in January 2025 following the ONS release of the 2024 Q3 cost indexes. A breakdown of the latest costs is given below:
- Energy costs based on the movement in the average prices of gas and electricity purchased by the manufacturing industry in GB as quoted by BEIS, up to Q2 2024.
- Labour costs carried over from Q1, based on the movement in the unit labour cost for the whole economy as quoted by ONS – due to a delayed data release Q2 2024 data was not available at the time of this publication.
- Other costs based on the movement in inflation (CPI)from the 2020 update to Q2 2024.
For further changes and to see how costs impact your own business, we offer an online spreadsheet that allows you to enter bespoke costs and milk quality into the calculations. This will then calculate unique indicators based on your own circumstances.
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