The Mintec Benchmark prices (MBPs) for UK fresh milk were last assessed at GBP 0.41/L in the week of 1st December, an increase of 15% quarter-on-quarter and up by 52.5% since its lowest price during May 2021. This price rise ahead of the festive period is mainly attributed to tightened supplies during autumn (September and October 2021) and a shortage of lorry drivers.
Total UK milk deliveries for October 2021 seasonally rose to 1.2m L, up by 3.7% m-o-m. However, October milk deliveries were 0.6% down on the previous year volumes and below forecast according to the UK Agriculture and Horticulture Development Board (AHDB). Additionally, there are reports that some UK farmers had to dispose of fresh milk during September due to the shortage in HGV truck drivers, which meant that supplies could not be delivered, exerting upward price pressure.
Despite an increase in the UK fresh milk price, this is unlikely to be sufficient to encourage higher production, as UK farmers continue to face escalating input costs such as feed and energy costs. Moreover, demand is building up with the upcoming festive period along with continued recovery in the foodservice sector. Thus, the UK milk market is likely to remain bullish until the UK milk collection peak season starts, during Spring 2022.