Milk solids basis doesn't dramatically change prices in the annual review.
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When we compare the ranking of processors in cent/litre compared with €/kg of milk solids we can see the majority of milk processors ranked similar (Table 1). The price ranges from €4.69/kg milk solids for Barryroe and Lisavaird suppliers down to €4.21/kg MS for Aurivo suppliers.
This milk solids conversion is not calculated or verified by KPMG. It is calculated by creating monthly milk solids production, a total milk solids production for the year, and then using the money paid out by the processors to calculate a euro per kilo milk solids figure. There are some minor tweaks as not all bonuses, etc, are paid out on milk solids – some are still paid out on a flat basis.
Did much change when we rank on milk solids? It depends on the processor – all of west Cork’s stayed the same. The big mover is Lakeland which moved up when you adjust for the slightly lower percentages in the North. We must remember processors are paying for solids, so if they get more solids then obviously they pay out more money as they have more product to sell.
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Why compare on solids? One of the issues with comparing processors on the price and volume (c/litre) figure is that processors that don’t get good milk solids from suppliers simply can’t pay out a high price per litre. They simply don’t get the high-quality milk solids so the farmer is not rewarded in a better price. The Irish Farmers Journal/KPMG milk price review calculates the volume of manufacturing milk in litres, and this volume is then used to calculate the price per litre from the total amount of money paid out to farmers. The methodology of displaying this result is currently under review.
Poor milk solids delivered by farmers to the processors can be for a variety of different reasons. The main reasons for poor fat and protein are that farmers are using low milk solids genetics, don’t have good grassland and possibly because herds are producing more milk indoors due to heavy ground conditions or higher annual rainfall in a region.
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When we compare the ranking of processors in cent/litre compared with €/kg of milk solids we can see the majority of milk processors ranked similar (Table 1). The price ranges from €4.69/kg milk solids for Barryroe and Lisavaird suppliers down to €4.21/kg MS for Aurivo suppliers.
This milk solids conversion is not calculated or verified by KPMG. It is calculated by creating monthly milk solids production, a total milk solids production for the year, and then using the money paid out by the processors to calculate a euro per kilo milk solids figure. There are some minor tweaks as not all bonuses, etc, are paid out on milk solids – some are still paid out on a flat basis.
Did much change when we rank on milk solids? It depends on the processor – all of west Cork’s stayed the same. The big mover is Lakeland which moved up when you adjust for the slightly lower percentages in the North. We must remember processors are paying for solids, so if they get more solids then obviously they pay out more money as they have more product to sell.
Why compare on solids? One of the issues with comparing processors on the price and volume (c/litre) figure is that processors that don’t get good milk solids from suppliers simply can’t pay out a high price per litre. They simply don’t get the high-quality milk solids so the farmer is not rewarded in a better price. The Irish Farmers Journal/KPMG milk price review calculates the volume of manufacturing milk in litres, and this volume is then used to calculate the price per litre from the total amount of money paid out to farmers. The methodology of displaying this result is currently under review.
Poor milk solids delivered by farmers to the processors can be for a variety of different reasons. The main reasons for poor fat and protein are that farmers are using low milk solids genetics, don’t have good grassland and possibly because herds are producing more milk indoors due to heavy ground conditions or higher annual rainfall in a region.
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