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For the first time in 12 months, NI milk processors have increased base prices, with Lakeland Dairies leading the upward trend early this week.
On Tuesday, NI’s largest milk processor announced a 2p/l increase to its base, plus the traditional 3p/l winter bonus for November supplies.
That brings suppliers to an “all-in” base of 32.25p/l, which is the highest starting price paid by Lakeland since March 2023.
The co-op points to improving sentiment within global dairy markets as the primary factor for the price increase.
Pressure shift
The significant price move by Lakeland has put pressure on other processors to follow suit.
Having paid one of the lowest base prices during 2023, Leprino Food quickly responded with a 2p/l increase.
With a 2p/l winter bonus, plus a 0.5p/l sustainability payment, Leprino suppliers move on to a starting price of 31.5p/l for November milk.
On Wednesday morning, Dale Farm raised its base by 2p/kg. Once the 2p/l winter bonus is included, it brings suppliers to a 34.55p/l base, before making deductions for milk collection.
Strathroy raised its base by 1p/l and with a 1p/l winter bonus, its suppliers are on a starting price of 32p/l.
Sustainability
As well as general concerns about farmgate prices, both Lakeland and Dale Farm have had to deal with some discontentment among suppliers around the roll-out of sustainability payments.
Farmers supplying Lakeland are reminded the closing date for its sustainability programme is Friday, 15 December.
The three-year programme commences in January 2024 and pays 0.5p/l for implementing measures on-farm that deliver positive environmental outcomes.
A carbon audit is a mandatory measure under the scheme and farmers must also have a supply agreement with Lakeland to receive the sustainability payment.
The Irish Farmers Journal understands there is reluctance amongst some farmers to sign up to the proposed scheme until greater clarity around terms and conditions is provided.
Most issues relate to the notice required in the event of terminating supply agreements, as well as a clause which sets out how the Lakeland board may require suppliers to take a shareholding in the co-op.
Dale Farm
Dale Farm indicates around 80% of its 1,250 suppliers signed up to its new sustainability scheme, which also starts in January with a 0.5p/l payment for undertaking certain measures.
The co-op has confirmed that surveys are still being received after the closing date of 1 December and field staff are making a push to help members sign up before the year end.
Dairy processors indicate these sustainability schemes are a necessary part of maintaining key market outlets for dairy products.
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