Müller confirms milk price rise of 1.5ppl

Müller, which revealed its price boost on Friday (September 30), said its farmers want to work with sustainable dairy companies to protect them against the harsh nature of the industry.

Müller Milk and Ingredients agriculture director Lyndsay Chapman said: “With winter approaching, dairy farmers are understandably anxious to see higher returns following significant increases in the value of dairy commodities and a tightening of supply.​

‘Boom and bust nature of dairy commodities’​

“We know that farmers want to work with sustainable and progressive dairy companies and we are investing to add value to milk so that our farmers are not so exposed to the boom and bust nature of dairy commodities. This approach helped to protect our farmers during the worst of the downturn and we intend to ensure that we maintain our milk price track record as the market picks up.”​

Müller Milk Group farmer board chairman Roddy Catto said: “This November increase is a further positive and much needed increase for our farmers on non-aligned contracts. As a farmer board we pushed strongly for a higher level of price increase and will continue to do so.”​

The price boost came after predictions that the number of global dairy farms is expected to fall by 17.5M by 2025. The estimation that the number of global dairy farms would decrease by nearly 15% was made at the 14^th​ annual International Farm Comparison Network (IFCN) Support Conference – held last month.

Another dairy firm to raise its milk prices recently was Arla Foods. Its prices rose for the second consecutive month​ – 1ppl from September 1, and 1.6ppl from October 1 – to 21.65ppl. Arla Foods said that while the price boosts are good news for farmers, milk production in Europe is slowing down.

‘Good news for our farmer owners’​

Arla Foods amba board director Johnnie Russell said: “This is the second consecutive month that Arla has increased its milk price. While the price is still not adequate, the ​[price boost] is good news for our farmer owners and demonstrates the strength of our business model.​

“Commodity markets, as well as yellow cheese markets in Europe, are continuing to strengthen, and prices across European retail markets also continue to firm. Milk production in the EU continues to slow down, and we expect this trend to carry on over the coming months.”​

Meanwhile, the average UK farmgate milk price was 21.34ppl in August, according to latest figures from the Department for Environment, Food and Rural Affairs (Defra). That was 0.57ppl more than the July average, but 1.99ppl cheaper than August 2015.