Farm Ireland
Independent.ie

Friday 17 August 2018

Milk price divide now over €2,200 per month

Gerald Quain, ICMSA
Claire Fox

Claire Fox

A €2,200 difference in April milk returns for the average 90-cow herd has opened up because of wide variation in the prices paid by processors.

VAT inclusive prices paid to farmers for April milk varied from 30.5c/l to 35.4c/l, a difference of 4.9c/l. Given that the average 90-cow herd supplied around 45,000 litres during April, this 4.9c/l price differential equates to a variation in milk earnings of €2,200 for the month.

The average milk returns for a 90-cow herd in April range from €13,725 to €15,930.

“With most co-ops announcing cuts to their milk price, it could be expected that there would an overall level of disappointment, but of greater concern for many is the large gap in prices across the co-ops and processors,” said ICMSA dairy chairperson Gerald Quain.

Mr Quain, said that farmers across the country will be analysing where they stand relative to farmers with other processors. In many cases, they will be asking serious questions about why their dairy business is so far behind others.

"Base price for April can range from 29cpl to 33.9cpl, and with bonuses and weather-related add-ons, the final attainable price can range from 30.5cpl to 35.4cpl.

"This variation is over 15pc, and for April milk alone is equivalent to over €2,200 for a 45,000-litre supply. This is a hugely significant sum given the very difficult first five months of the year," he pointed out.

Mr Quain said farmers supplying lower-paying processors had a reasonable expectation that the current price gap would be closed given the recent improvements in global dairy markets.

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Base price

Meanwhile, Arrabawn reduced its April milk price by 1c/l to 32.05c/l. This comprises a base price of 31.05c/l and a 1c/l support payment.

Aurivo cut its milk price by 1.52c/l and will pay 30.5c/l including VAT for April manufacturing milk. The price is made up of a base price of 30c/l and a 0.5c/l seasonality payment.

Dairygold is on 32c/l for April supplies, which is a cut of 1c/l, while Kerry Group dropped 2.5c/l to 31c/l.

Last week, Glanbia cut its April milk price by 2c/l to 31c/l, including a 2c/l support payment from Glanbia Co-op, while Lakeland Dairies dropped 1c/l to 33.28c/l.

Carbery in West Cork remains the best paying processor at 35.4c/l for April milk, with suppliers through Lisavaird Co-op on 35.1c/l.

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