First Milk says its milk prices will continue to rise in the coming months.
In a letter to members, chairman Clive Sharpe said, “Our view of the market outlook is positive as we see prices moving towards 25ppl ($0.32) in coming months.”
Following the increases, First Milk is now paying between 20ppl and 21.98ppl (25.9-28.5 cents), depending on the pool, and including, for some pools, a Tesco cheese group payment estimated at 0.98ppl (1.3 cents) for October.
European prices continue to firm
Arla Foods said that there is also a positive currency impact as a result of the new quarter’s average exchange rate being introduced to the pricing mechanism.
When the increase to the on-account price, and currency impact, are applied to the UK standard liter, the increase is 1.6 pence, taking the conventional price to 21.65 pence ($0.28).
Arla Foods board director, Johnnie Russell, said that 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,” Russell said.