Glanbia and Lakeland hold milk prices for October
Glanbia and Lakeland Dairies have announced that they will be holding there milk prices for October supplies.
Glanbia Ireland will pay its milk suppliers 35 cent per litre (cpl) including VAT for October manufacturing milk supplies at 3.6pc butterfat and 3.3pc protein. This price is unchanged from the September price.
Lakeland Dairies has held its price for October milk at 36.5 cents per litre including VAT.
Glanbia Ireland Chairman Henry Corbally said “While wet weather has affected early season output in New Zealand, the key EU regions of Germany, France and the UK are now reporting higher milk output.
"Consequently market sentiment has weakened. The Board will continue to monitor market developments on a monthly basis,” he said.
Global dairy prices slumped to a seven-month low on Wednesday, suggesting an earlier rally was running out of steam and that farmers' incomes could be hit if the trend continued.
Global dairy prices slumped to a seven-month low last week, suggesting an earlier rally was running out of steam and that farmers' incomes could be hit if the trend continued.
Prices had risen in the second quarter on strong global demand and as production eased, but have since had a bumpy ride on volatile global demand. "The soft result adds to the likelihood of Fonterra downgrading its milk price forecast for the current season," BNZ markets strategist Jason Wong said in a research note.
Dairy giant Fonterra currently pays out NZ$6.75 per kilogram of milk solids to its New Zealand farmers.
Farmers are still nervous after years of plummeting prices which only started a slow recovery at the end of 2015. Chris Lewis, dairy chairman for farmers' industry group Federated Farmers, said that soft results in recent auctions were disappointing and that the next two auctions would be critical to determining any cuts to the farmgate milk payment.
"We're definitely not going to take our eye off it ... The next auction there could be a bit more of a dip," said Lewis. The currency fell around 0.5 percent to $0.6907 in the wake of the auction, given the dairy sector generates more than 7pc of the nation's gross domestic product.
Longer term, economists and farmers were hopeful the situation would improve as wet weather curbed production in New Zealand, the world's largest dairy exporter. The lower supply could lead to a pick-up in prices in the new year, Lewis said.
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