Farm Ireland

Monday 11 December 2017

More pain on way as milk prices cut again

Declan O'Brien

Declan O'Brien

Further blow as €16.5m superlevy fine way over €12m forecast

Dairy farmers were on the receiving end of further cuts this week, with a raft of processors moving to reduce milk prices for the second month in a row.

Kerry Group, Arrabawn, Lakeland Dairies, Tipperary Co-op, Centenary and Connacht Gold have all pulled quotes for May milk deliveries by between 1.5c/l and 2.5c/l. This follows price drops of a similar magnitude for April supplies.

In a further blow to suppliers, the Department of Agriculture confirmed that Ireland's superlevy fine will be significantly higher than initially forecast. It was originally estimated that farmers would have to pay around €12m but the final figure worked out at €16.5m.

Projections for the over quota position for 2011/12 had been put at 0.36pc, but the final figure was 1.05pc. This was due mainly to higher than expected butterfat levels.


In terms of milk prices for May, Kerry dropped its price by 2c/l to 29c/l including VAT, while Lakeland Dairies cut its price by 1.5c/l to 30c/l VAT inclusive.

Arrabawn and Connacht Gold have also pulled milk price for May. Arrabawn is down 2c/l to 28.5c/l, while Connacht Gold is down 1.5c/l to 28c/l.

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Milk prices at Tipperary Co-op are back 2.25c/l for May to 28.75c/l, while Centenary is down 2.5c/l to 28.5c/l.

The four West Cork co-ops are expected to announce their milk price today. However, it is widely expected that Carbery -- which processes milk collectively for Bandon, Barryroe, Lisavaird and Drinagh -- will pull its price by as much as 3c/l. This would bring the West Cork co-ops back to 31c/l including VAT.

Dairygold is also due to hold a board meeting today to set its milk price for May. It is believed the co-op will pull prices by between 2c/l and 2.5c/l. The co-op paid 31c/l (including VAT) for April supplies. Last week Glanbia dropped its price for May supplies by 2.5c/l to 28.5c/l.

Reacting to the latest announcement of milk price cuts, ICMSA deputy president Pat McCormack expressed extreme concern at the fact that processors were now continuing to cut milk price despite the outlook on world markets improving significantly.

He pointed to the situation of neighbouring farmers where one was supplying Lakelands and the other Glanbia now looking at a difference of 1.5c/l.

He said this was a very significant difference at any time but was even more alarming in the context of peak production months.


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