January prices hold - Wexford cuts - Arrabawn up for February

By Joe Rea

27 March 2004: There are two items of good news in our review of January and February prices. The January league shows that all creameries have held their prices while for February Arrabawn increased its return.

Now for the bad news - Wexford has cut its February price.

The January league is headed by Monaghan. It is an impressive leader paying 28.60c/litre (102.3p/gallon). This price includes its traditional spring bonus which now stands at 1.6c/litre (5.7p/gallon). Monaghan also top the actual payout column at 28.4c/litre.

Kerry, Wexford and Newmarket are the top three after Monaghan on the standardised basis. However, second place on the payout basis goes to Newmarket at 27.95c/litre, just the £1 per gallon.

Newmarket does not pay any spring bonus, but its high payout price is propelled by its high fat, at 3.83%, and a magnificent protein, at 3.24%. Kerry is in third position on payout. Here again, high fat and protein are critical ingredients. The lowest price on payout is Glanbia. Its protein at 3.09% is a factor here, especially because Glanbia (and Wexford) have the highest percentage differential for protein in the league.

Kerry's Northern Influence

Fivemiletown, the smallest milk processor in the North, tops the January league. It is paying 91.47p sterling per gallon. That is the equivalent of 30.3c/litre placing it ahead of all creameries in the Republic.

This is a fine performance by this small Co Tyrone co-op. The Fivemiletown price is 1.74c/litre, (6.2p/gallon) ahead of Glanbia Fermanagh at the bottom of the Northern league. Fivemiletown is also the only creamery in the North to show a plus when January 2001 price is compared to January 2004.

It is of interest that the "Kerry genius'' hovers in the Fivemiletown background. One of their key lines of production is cheese curd for what was originally the Golden Vale Cheese Strings.

This value added product is now within the Kerry empire and thereby influencing a good milk price at Fivemiletown. Small niche players can have an important role in dairy processing.

Predicted prices for February

The major disappointment in the predicted February table is Wexford. They have cut their February 2004 price by 0.5c/litre (1.8p/gallon) compared to January 2004. This is out of character. Wexford has traditionally been a high price creamery. It now finds itself in unfamiliar company paying less than Dairygold and just ahead of Glanbia.

In an era of price cuts Arrabawn is reversing the trend for February. It has increased its price by 0.18c/litre (0.64p/gallon). This is a landmark event for its suppliers. It means that rationalisation savings, which were promised, are starting to come true at farm level. On league placing it puts Arrabawn in company with pace setters Bandon and Drinagh. Not a bad place to be.

Rationalisation is well and good. However, it makes no practical sense unless it impacts on increased milk prices at farm level. This increase by Arrabawn is, therefore, a fine achievement. Obviously, it must also reflect that their financial results in 2003 have been satisfactory.

The overall indications for February is that all creameries, with the Wexford exception, are holding their price. March maybe a little more difficult, but the line on price should be held until June.

Irish Farmers’ Journal Milk League Tables

If you would like to view the Irish Farmers Journal Milk League tables dating back to 1999 click on the relevant month and year.

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