A flurry of milk price announcements with many buyers raising farmgate prices by more than 3p per litre between November and January, has left many questioning how high values will increase.

According to AHDB Dairy, market values for most dairy products have been steadily increasing since July, pushing up the equivalent market value for milk. Based on their milk market value indicator (MMV), changes in product values normally translate into higher farmgate milk prices around three months later.

Slightly lower product pricing at the beginning of the summer (May through July) translated into a small drop in the MMV indicator of 0.3ppl, and an expected drop in the average GB milk price (excl. aligned) of 0.2ppl. In reality, there was a marginal increase in average milk prices over that period of 0.5ppl, due mostly to increased prices on manufacturing contracts.

Between August and October, the MMV indicator increased by 3.5ppl, which would suggest an increase of 1.8ppl on the average GB farmgate milk price over the subsequent three-month period (Nov21-Jan22).

When accounting for price announcements to date, actual changes have translated to an average increase of 3.1ppl between November and January.

Wholesale market prices have also risen strongly in November and December, with the MMV indicator rising a further 5.2ppl, which would normally equate to a 2.6ppl increase in average GB farmgate milk prices in February and March.