Glanbia Ireland and Lakeland Dairies announce November milk prices
Glanbia Ireland and Lakeland Dairies have today announced their milk prices for November supplies.
Glanbia Ireland will pay its milk suppliers 35 cent per litre (cpl) including VAT for November manufacturing milk supplies at 3.6pc butterfat and 3.3pc protein. This price is unchanged from the October price.
Glanbia Ireland Chairman Henry Corbally said “higher global milk supply has led to reduced market returns for the basket of dairy products. The Board will continue to monitor market developments on a monthly basis.”
Meanwhile, Lakeland Dairies has also held its price for November milk at 36.5 cents per litre including VAT and including a 1 cent per litre Butter Bonus.
Predictions of a significant fall-off in milk prices from the first quarter of 2018 have been dismissed by the farm organisations.
Both the ICMSA and IFA have urged processors to commit to holding milk prices through next spring despite the deteriorating market sentiment.
Kevin Bellamy of Rabobank said the early indications were that milk prices across Europe could fall to 33-34c/l in the spring. Milk prices on the continent are currently around 39-40c/l, while Irish dairies are working off a base of 36-37c/l.
But the dairy analyst cautioned that these projections were dependent on supply/demand considerations. Mr Bellamy said prices of 35c/l had driven growth in most global markets, with increased output reported in the USA, Latin America and Australia.
IFA dairy chairman Sean O'Leary said that while international dairy prices had weakened, Irish co-ops were benefiting from contract returns signed in better times, as evidenced by the September rise in the Ornua PPI.
Mr O'Leary called on processors to reassure farmers by guaranteeing milk prices for the spring and thereby helping them plan for 2018.
"Irish farm-gate milk prices increased by 52pc, or 12c/l, in the last 15 months, but this was after over two years of falling prices, which 20 months were below 30c/l," Mr O'Leary pointed out.
"In this context, even allowing for the weaker outlook for 2018, it is crucial that co-ops would hold milk prices at the very least until next spring, as they can afford to."
Meanwhile, Ger Quain of ICMSA accused processors of "softening up" farmers in preparation for a price cut early in 2018.
While he accepted that markets had undoubtedly come back in recent weeks, he maintained that global supply/demand balance remained positive.
"It's the old story where upward price movements trickle back to the farmers, while the very first sign of a fall-back in demand seems to act like milk price trap-door.
"We reject it, and we'll resist it," said Mr Quain. Although processors have been reticent about talking publicly of a drop in milk prices, dairies have warned suppliers at information meetings over the last week that markets had turned.
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