Farm Ireland
Independent.ie

Sunday 25 February 2018

Dairygold's May milk price jumps to 37.5c/l

Caitriona Murphy

Caitriona Murphy

Dairygold has increased its milk price by 2c/l to bring it to 37.5c/l for May supplies.

The Munster co-op had lagged behind many other co-ops for April milk, remaining on 35.5c/l when many other processors had increased to 36-37c/l.

Lakeland Dairies has become the latest co-op to incorporate its weather-related bonuses into its base milk price, bringing it to 37c/l for May milk.

Centenary Thurles is also on 37c/l for May milk, an increase of 1c/l on the previous month.

Kerry still leads the way on 38c/l, with most other co-ops paying between 37c/l and 38c/l. The exception to this is Wexford Creameries, which is to pay 35.5c/l, including VAT and bonuses, for May supplies, an increase of approximately 0.5c/l.

Despite the continued strength of the dairy market, ICMSA dairy chairman Pat McCormack warned that input costs were in danger of eroding the improvement in milk prices.

Mr McCormack maintained that milk prices would have to remain at consistently high levels to dilute the cost/price squeeze on farms.

"While milk prices are close to record levels at present, key input costs are also increasing year-on-year and at a faster and more consistent rate," he said. "That means that even an increasing milk price is being systematically eaten up and overtaken by input costs."

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CSO figures show that since 2010, fertiliser and feed prices have increased by 27pc and 38pc respectively, while milk prices have risen by just 19pc in the same period.

Meanwhile, Kevin Kiersey of the IFA maintained that milk prices should hold until the back end of the year at least.

"Even allowing for the significant price adjustments of the last three Fonterra auctions, commodities continue to trade within the EU and internationally at historically high prices, in the face of continued tight supplies and sustained demand," Mr Kiersey said.

AVERAGE

"EU average dairy market prices reported for last week indicate a slight increase in the butter price to €3,980/t, skim milk powder (SMP) to €3,120/t, whole milk powder (WMP) slightly down (€10/t) at €3,680/t, cheddar up at €3,540/t and whey also slightly up at €1,030/t," Mr Kiersey pointed out.

"A reasonably representative Irish product mix, based on those average market prices, would return just over 45c/l before processing costs," he said.

"I am clear that Irish co-ops have access to current gross market returns for our main commodities of around 45c/l before processing costs. While I accept that many will have committed to contracts for earlier supplies, many of those contracts are coming up for review, and higher prices are bound to prevail in the current market conditions," Mr Kiersey predicted.

Irish Independent