European milk prices ‘turn the corner’
European milk prices have turned the corner, with the first monthly increase since last November seen for June milk, in the monitoring by the Dutch LTO farmer organisation of prices paid to farmers by 17 milk processors.
And many EU co-ops have already announced rising prices into September, despite butter and skimmed milk powder price quotations being under pressure since June, in a very quiet market with little buying interest, and intervention powder releases having pushed the market down further.
Here, ICMSA Dairy Chairman Gerald Quain said this week that payment at the Ornua PPI level of 32.8 cents per litre is absolutely essential for July milk, given the pressures on dairy farmers and the expected substantial reduction in their income.
IFA Dairy Chairman Tom Phelan said the unchanged June milk price at many co-ops was disappointing, and he called on co-ops to reflect the average EU return for July, at about 32c/l plus VAT. He welcomed co-ops as Glanbia, Dairygold and Kerry’s deferred and/or interest free credit for feed and fertiliser purchases, and Dairygold and Kerry’s rebates for purchases. But the highest milk price is always the best support for farmers, he said Dairy Crest in the UK, the lowest paying of the 17 milk processors monitored by LTO, has announced price increases for three months totaling about €3.30 per 100 kg. This includes a supplementary payment of 0.5p per litre from September for farmers due to the extreme weather conditions. Arla and FrieslandCampina have announced milk prices for July and August.
Arla adds on a total of €2.80 per 100 kg, FrieslandCampina adds €1.50 in July and holds the price in August (guaranteed price for August 2018 €35.75 per 100 kilos of milk). DMK adds on €1 per 100 kg in July. Savencia in France will pay €2.40 more in July and will hold the price in August. Lactalis in France will pay a total of €2.30 per 100 kg extra in July and September.
The June increases relegated the three Irish co-ops which are monisuch tored to sub-average prices. Compared to the average of €32.53 per 100kg, the price was €32.30 at Dairygold, €32.09 at Glanbia, and €32.43 at Kerry Agribusiness. Compared to the 12-month rolling average of €34.91, the price was €34.49 at Dairygold, €33.88 at Glanbia, and €34.45 at Kerry Agribusiness. An unchanged overall average index in Tuesday’s GDT auction points to steady global markets, however the products of most interest to the EU, butter and skim milk powder were 3.2% and 0.3% cheaper, respectively.