UK milk prices are being held back mainly as a result of a lower number of solids in the milk compared to other EU dairy producing nations.
Recent AHDB Dairy analysis has showed the UK tends to be at the bottom of the EU farmgate milk price league table.
New analysis now suggests that this is mainly a result of lower milk solids in the milk.
The UK’s average milk solids are lower than the other main EU milk producing nations, apart from France, according to AHDB Dairy.
The EU farmgate milk price league table, published by DG Agri, uses average prices paid in the month. They are calculated by adding up payments made to farmers and dividing by the volume of milk collected and paid for.
The main milk buyers of all of the countries pay for fat and protein. As a result, if the milk solids in one country are higher than another, the actual price paid will be higher in order to pay for those additional solids.
As an alternative to quoting milk prices in pence per litre, AHDB Dairy analysed prices based on pound sterling per kilogram of milk solids.
The result moves the UK up from sixth to third, on average over the last 3 years. France sees a significant increase in its relative performance due to its low level of milk solids.
Of the remaining five countries there is only 1% between the top and bottom payers. By comparison, in pence per litre terms, the bottom five have a price gap of 6%.
AHDB Dairy said the calculation is rudimentary because fat and protein will have different values depending on the markets they are entering, and certainly in the UK a large proportion of milk is destined for liquid markets where protein is less important.
However, what the calculation suggests is that lower milk solids is one of the main reasons why the UK lags behind the other main milk producing nations in the EU in terms of farmgate milk price.