Milk prices at 40c/L as supplies hit by weather

Dairy processors have nudged base milk prices in the direction of 40c/L ahead of peak production, saying global dairy markets are looking relatively positive.

However, milk yields are back 10pc in some regions due to the poor weather of recent weeks.

Tirlán increased its base milk price to42.08c/L(incVAT)forFebruarymilk supplies at 3.6pc butterfat and 3.3pc protein, which includes a Seasonality Payment of 3c/L (inc VAT).

Tirlán Chairperson John Murphy said: “While dairy markets are generally stable, the board is acutely aware of the severe challenges facing our milk suppliers this year as ongoing wet weather makes grazing conditions very difficult.

“The February rainfall total at weather stations in the south-east was 50pc80pc higher than the long-term average. This is having a significant impact on milk supply and creating very challenging conditions for farmers, with yields per cow 10pc lower than the same period last year.”

Dairygold increased its base price for February supplies by 2c/L to 40c/L based on standard constituents of 3.3pc protein and 3.6pc butterfat, inclusive of sustainability and quality bonuses and VAT.

A company spokesperson said: “Dairy market prices have marginally improved recently, primarily due to a decrease in global milk supply, but with demand remaining challenging, future pricing forecasts remain uncertain.

“The Dairygold Board felt that it was important to set a strong milk price to provide confidence to milk suppliers as the peak milk production season approaches. The Dairygold Board will continue to monitor markets closely and review milk price on a monthly basis.”

Kerry Group announced a milk price for February milk supplies of 40c/L (inc VAT) at 3.3pc protein and 3.6pc butterfat, consisting of a base price of 38c/L (inc VAT) and a milk contract payment of 2c/L (inc VAT) on all qualifying milk volumes.

It said in a statement that dairy buyers remain cautious, but global consumer demand is improving, which should lead to improved dairy demand.

“Milk production growth is sluggish, leading to optimism around dairy prices in the medium term.”

Lakeland Dairies announced a base price of 41.4c/L (3.6pc butterfat and 3.3pc protein) will be paid for February milk in the Republic of Ireland. The base price has increased by 1.5c/L, including the new 0.5c/L Sustainability Incentive Payment. The 1c/L Input Support Payment paid on all January milk now forms part of the base price for February milk.

All suppliers will automatically receive a 2c/L early calving bonus, it said, while qualifying farmers will also receive a 5c/L out-of-season payment.

Payment

In Northern Ireland, a base price of 34p/L will be paid for milk supplied in February. The base price has increased by 1.25p/L, including the new 0.5p/L Sustainability Incentive Payment. The 1p/L Input Support Payment paid on all January milk also now forms part of the base price for February milk.

It said, in a statement, that global dairy markets remain in a delicate position, with the supply/demand dynamic “tentatively poised”.

“Buyers are continuing to adopt a cautious approach, but demand remains reasonably solid, driven by weaker production in Europe and New Zealand.” It said, as the spring season approaches, milk supply is expected to remain sluggish, which should assist in providing stability to the market.

“Geopolitical tensions, supply chain disruptions and global economic headwinds remain a concern and will require careful management and monitoring. Lakeland Dairies will continue to closely monitor the markets in the coming weeks.”