Top prices in the April league are those paid by Glanbia Milk and Fivemiletown Co-op, whose milk is purchased by Glanbia Ingredients Ireland Limited (GII). They stand out with prices above 19p/litre after deduction of transport charges for a supplier of 650,000 litres per year, with average NI seasonality of supply and with average milk quality of 4.1% butterfat, 3.24% protein, 4.71% lactose, TBC of 18 and SCC of 177.

The Glanbia Milk and Fivemiletown prices are also the best across a range of milk qualities (Table 1) and for the two sizes of supplier compared in Tables 2 and 3. They were the only buyers paying prices above 20p/l for the good-quality milk as specified in Table 1. This is after deduction of transport charges.

The extra value of high-quality milk is increasingly significant with overall price levels currently so low.

Although buying a relatively small volume of Northern Ireland’s milk, GII has generally featured among the top payers here, as can be seen in the Glanbia Milk and Fivemiletown prices over a 12-month period (Tables A and B).

The deal under which Fivemiletown Co-op arranged to sell its milk to GII for a five-year period has turned out well for members of the co-op during its first couple of years. The co-op is also obtaining rental income from Dale Farm for use of its cold store and production facilities at Fivemiletown.

Because of legal technicalities, members of the Fivemiletown Co-op were not eligible to purchase shares in Glanbia Co-op when those shares were offered last year.

Co-op shares

The Glanbia Milk suppliers who were in a position to buy those shares have benefitted from top-up payments per litre of milk supplied and from share dividends issued recently. The Glanbia Co-op shares also carry the anticipated value of further spin-outs of shares in Glanbia plc.

It was unfortunate for the milk suppliers in NI that the opportunity to purchase the co-op shares came at a time of relatively poor prices for milk, as less than half of the suppliers to Glanbia Milk felt able to take up the offer, bearing in mind that the minimum holding was 2000 shares at €5 each. This required an initial payment of €4,000 followed by payments of €2,000 per year for three years. The recent dividends would have returned around €700 on 2,000 shares held.

Over 18p/l

Third position in the April league is occupied by Lakeland Dairies, the only buyer whose price was within 0.5p/l of the top.

Lakeland’s prices were also third best across the range of milk quality and the differing sizes of producer compared (Tables 2 and 3).

LacPatrick Co-op has the only other prices over 18p/l in this league table, including Red Tractor farm-assured milk and milk that does not qualify for its Red Tractor bonus of 0.2p/l. However, the league table does not include Strathroy Dairy, whose estimated price was slightly over 20p/l for milk of the quality defined above for the April league. That is calculated from a base price of 19p/l, which was 2p/l above that of LacPatrick.

Bottom

At the bottom end of the league table, the prices paid by Fane Valley were almost 1.7p/l below the prices paid by Glanbia Milk and were more than 1.3p/l below the prices paid by Lakeland Dairies. This was the final month before the business of Fane Valley Dairies became part of Lakeland Dairies operations in Northern Ireland.

Our comparison of prices paid over the past 12 months (Tables A and B) indicates that the Fane Valley prices have trailed the Lakeland ones by between 0.5p/l and 1p/l in most quality categories.

Close to the bottom of the league price paid by Fane Valley was the price paid by Glanbia Cheese for milk that did not qualify for its Red Tractor bonus of 0.4p/l.

All of the main buyers of milk in NI declared base prices for April milk unchanged from their March base.

Britain

Meanwhile, in Britain, the prices paid by First Milk producer co-op were reduced for April.

First Milk now operates at least five different base prices and terms of milk purchase for different regions – and differing cuts were applied in each region.

Also, First Milk operates ‘‘A’’ and ‘‘B’’ prices for milk, with the ‘‘A’’ price applying to 80% or 90% of the milk supplied and the much lower ‘‘B’’ price applying to the remainder of the milk. This makes it virtually impossible to calculate the producer price paid and our Tables 2 and 3 provide only an estimate based on the information available.

Prices for 12 months

While Fivemiletown Co-op and Glanbia Milk paid the best prices for good- and average-quality milk supplied by the smaller producer over the year (table A, 350,000 litres), they were third best after Lakeland and Dale Farm for that quality of milk from the supplier of one million litres per year (table B).

There was only a small fraction between the prices paid by these four buyers for average-quality milk.

Lakeland’s prices were best for below-average quality milk but ranked fourth best for ‘‘good’’ quality.

Lakeland’s new ‘‘super quality bonus’’ for milk with TBC of less than 10 and somatic cell count under 100 will add 0.35p/litre to its price in the ‘‘good’’ category from April 2016 onwards.

The Dale Farm Red Tractor-assured milk prices were the best available in the good-quality milk category from the supplier of one million litres per year.

Pressure tends to force changes and these are certainly changing times in dairy farming in Northern Ireland.

Just before the Balmoral Show, Lakeland Dairies set out the terms for a fixed price to be paid for a portion of the milk that it buys from its suppliers during the 33 months from 1 June 2016 to 31 December 2018.

The base price on offer is 20.75p/l from June to September this year and from April to September 2017 and 2018. A slightly higher price of 21.75p/l applies for October to March each year of the scheme. The initial price is clearly above the current Lakeland base of 17.65p/l and certainly looks better than the base prices in prospect for the summer this year and for who knows how long after that.

It is a voluntary scheme for producers, who can offer to supply either 5% or 10% or none of their milk at the fixed price. However, taking part in the scheme involves a commitment to supply all milk to Lakeland Dairies over those 33 months.

Now, Aurivo has announced that it will offer its suppliers a fixed milk price scheme, which will run for 30 months from 1 August 2016. The fixed price will be available on up to 10% of the supply from each participating producer for a period of 30 months from 1 August 2016. The producer will be required to sign up to Aurivo’s milk supply agreement for the duration of the scheme.

Further details of the fixed price for the Aurivo scheme in NI have not yet emerged. It is expected that there will be a meeting soon at which suppliers will hear more about the scheme. Regional meetings were being held for Aurivo suppliers in the Republic of Ireland this week, where the price announced is 28.25c/litre (including VAT) and participating farmers must be in the Bord Bia sustainable dairy assurance scheme.

The Lakeland Dairies scheme in the Republic of Ireland is understood to be offering a base price of between 27c/litre and 28c/litre (excluding VAT) for milk with 3.6% fat and 3.3% protein.

The fixed price schemes from Lakeland and Aurivo follow similar initiatives by Glanbia, Dairygold, Carbery, Kerry and North Cork Co-op. In the Republic of Ireland, Glanbia has had seven fixed-price offers so far, the most recent of which runs for 33 months from 1 April 2016 to 31 December 2018.

According to the processors, the fixed-price schemes are linked to volumes of product sold forward at fixed prices. Further such deals are being negotiated by Lakeland Dairies and other processors, with a view to further offers of fixed-price schemes for relatively small portions of the total milk processed. These could overlap the initial scheme and could run beyond December 2018. Participation in these schemes will remain voluntary for producers.

It is a dilemma for many producers who will struggle to make a margin at the prices on offer but recognise that these are the best available prices, at least in the short term. The ability to sell milk on a fixed-price basis still leaves producers in a position of risk so long as the cost of feedstuffs and other inputs is not known. Fixing those prices would be the next step.

Despite the number of cattle on NI farms being at the highest level since 2006, the amount of concentrate fed on farms during the first quarter of 2016 has continued to decline.

Figures released by DAERA show that 320,000 tonnes of compounds and mixes were fed to cattle over the first three months of the year compared with 336,000t for the same period in 2015. The most recent peak came in 2013 when a total of 365,400t were fed from January through to March, although back then producers were fast heading into a fodder crisis due to the poor summer weather of 2012.

Looking at the individual figures, dairy cow compound feed has held up and at 128,700t continues to account for 40% of all concentrate feed offered to cattle. The main change is in coarse mixes or blends fed to dairy cattle, which is down over 14,000t to 64,200t. Coarse mixes fed to beef cattle is down 4,000t to 67,000t.

With pig numbers in December 2015 at their highest level since 2008, it has meant that the amount of feed used in the pig industry has been steadily increasing over the last number of years. In total, 50,200t was fed in the first quarter of 2016, up from 49,800t for the same period in 2015. The amount of feed used in the poultry industry has also been on the rise in recent years on the back of expansion in the sector, with 184,900 tonnes fed in the first quarter of 2016. However, the amount of concentrate feed offered to sheep over the first three months of the year was down again, with 28,100t fed, the first time it has dipped below 30,000t in recent years.

Fertiliser

The DAERA statistics also suggest that farmers have been more cautious when it comes to buying fertiliser this year to date, with 69,400t delivered from January to March, compared with 75,800t for the same period in 2015. The 2016 figure is the lowest since 2011, although the main buying period for fertiliser traditionally runs from April through to June.