Milk prices lower despite lift in GDT

 

Despite eight consecutive increases in the global dairy trade, Irish milk prices continued to soften for February payments to Irish milk producers.

Some processors held prices but most slipped back from the previous month. Carbery, supplied by the West Cork Coops, held its January price of 31.8c/l for February deliveries. However, Arrabawn dipped by 0.75 cents to 31.41c/l while Kerry was also off, sliding to 31c/l. Dairygold was down a cent to 31.19c/l and Aurivo held the base price at 30.5c/l. Meanwhile Glanbia also shifted downwards to a base price of 30c/l including VAT. In addition there was a 0.5c/l.   Coop payment and an ‘interim market payment’ of 1c/l. Whether that interim payment relates to an anticipated top-up for 2018 supplies or an expectation of improving prices over the coming months is unclear. The likelihood is that Glanbia management and Directors are anticipating the need to bring the 2018 average price up to reflect a commitment to deliver a milk price just behind that of the West Cork Coops. Another interesting milk price development relates to the cross-border processors, LacPatrick and Lakeland.  Both have split their payment systems reflecting euro/sterling differentials. Northern producers took a price hit of 0.75p/l while Southerners supplying LacPatrick held base price at 31.75c/l. Lakeland suppliers saw their February price dip by one cent to 32.79c/l. Both processors have now merged so we can expect milk price merging on either side of the border for future supplies. Whether up or down is not yet clear. All in all, there is disappointment that most Irish prices are now well off the Ornua PPI of 32.2c/l including VAT.