The November milk statement that arrived to most dairy farmers just before Christmas confirmed the November price increase that had been announced.

The net effect on the Irish Farmers Journal monthly milk league is that, ranked on milk solids, there is very little between the main processors. Those in division three and low division two last month have picked up considerably and have implemented a 0.28 c/kg milk solids increase (2 c/l) to bring them back into play alongside the rest of the milk processors.

All the west Cork co-ops passed back the 1c/l (0.14 c/kg MS) that Carbery allowed and hence they stay ahead of the chasing pack for November.

Aurivo and Glanbia were the other two big movers for November, pushing both back up into contention towards the top of the league. This Glanbia price includes 1 c/litre top-up that all co-op suppliers get.

On average, the Irish processors lifted milk price about 2.5c/litre for September, 2.5c/l for October and 1.5c/litre for November.

That’s 6.5c/litre over three months returning some of the global price increase in dairy commodities.

As you can see in the international milk price map (and cartoon) prices for most other countries including New Zealand are still ahead of Irish processors. This keeps the pressure on Irish processors as board members gather to set December price.

West Cork remain on top

West Cork co-ops continue to lead the way for the November milk league. Drinagh holds on to top spot despite the fact it controls the catchment area furthest away from Ballineen (Carbery central processing site). Remember, Lisavaird only lifted its October price by 1c/litre and this allowed Drinagh jump ahead. The other two west Cork co-ops, Bandon and Barryroe, follow closely in third and fourth spot respectively.

Centenary Thurles and Glanbia lead the way at the top of division two both having increased October price by 2c/litre. Remember a good chunk of the Centenary milk is supplied to Glanbia and hence there is never much between them on price. After that you could throw a blanket over the rest of the milk processors as there isn’t much between them. They are all paying in the range of €3.85 to €3.90c/kg milk solids at national average milk solids.

LacPatrick and Lakeland bring up the rear of the league but in fairness they are not that far away from the rest. Lakeland tell me they have a lactose bonus for November (0.28 c/litre) which I haven’t seen on the milk statements, but, I’m told it is included in the Lakeland A and B values.

The average November milk league price is 3.93c/kg milk solids or about 28c/litre excluding VAT. All these prices exclude the SDAS bonuses, top-ups available for lower somatic cell count or ‘out of season’ bonuses that some processors pay out on.

The November price rises come in response to rising international and domestic market values for butter and cheese.

€196 difference in cheque

When we compare the milk prices at the same milk solids (national average) there is only €196 of a difference in the base November milk cheque comparing the west Cork co-ops and the Northern co-ops at the bottom. Figure 1 shows the difference in pay out between processors for the standardised litre at 3.49% protein and 4.11% fat supplied during November. It shows the difference in the November milk cheque for a supplier with a normal seasonal Spring supply curve (4% in November) for a farm that will produce 300,000 litres (66,000 gallons) in the year.

Actual November price paid out

Figure 2 shows the difference in the actual November milk cheque delivered. When I say “actual” I mean the money paid out for the different milk solids collected from each of the different processors.

Milk processors collect milk that varies in fat and protein percentage so, in effect, the quality of milk goes some way to deciding the milk price paid out. The processor can’t pay top price if the quality is poor. The higher the milk solids (fat and protein), the higher the milk cheque.

Farmers should be rewarded for better milk solids so if a processor is getting less milk solids it will pay a lower price and rightly so as it can make less product from that milk. The combination of good milk price and good milk solids puts the small north Cork Co-op Boherbue top of this graph for November.

Big difference in A and B values

From the main table you can see what value individual processors put on the value of fat and protein. Lakeland dairies has a value of €6.34 per kg milk solids compared with LacPatrick, which only has a value of €4.52/kg on fat. That’s a difference of almost 1.82c/kg of fat. Processors will vary price of each depending on product mix etc.

LacPatrick tops the B value league, paying €3.70 per kg milk solids. It values the fat component almost €1/kg ahead of Glanbia, Tipperary, Lakeland and Arrabawn.

Targeting 200 SCC

Some processors have bonuses and penalties for milk of higher or lower somatic cell count (SCC). The table below left shows how the November price would change depending on what processor you are supplying. Our monthly league is ranked on 250,000 cells/ml for SCC. That means base price at 250 and if some processors offer a bonus for milk under 200 SCC then they are not rewarded for it in the milk league. The green boxes on the left highlight the processors that deliver a better price for milk under 200,000 SCC.

The red boxes on the right highlight the processors that impose a penalty on milk delivered over 300,000 SCC. The onus is on all individual suppliers to reduce somatic cell count below 250,000 SCC.