While milk prices have continued to fall since May and base prices for last month dropped by between 1p and 2p/litre from the August levels, the actual ex-farm prices received per litre for average September milk were down by between 0.32p/l and 1.36p/l on the previous month. This was due to the higher compositional quality of milk in September, partly offsetting the lower base prices.

Last week, we published the details on base prices, which indicated falls of 2p/l by Aurivo/Donegal and Town of Monaghan and reductions of 1.75p/l at Lakeland Dairies, Glanbia Milk and Fivemiletown.

The top five prices in the league were down by between 1.03p/l and 1.36p/l, month on month, with Lakeland’s position improving over Monaghan’s but no change in the order of the top three.

Meanwhile, the bottom five prices are down from their August levels by between 0.32p/l and 0.65p/l. This means that they have partially closed the gap between them and the top five.

By virtue of the least fall in price (0.32p/l), Fane Valley’s position has moved above Ballyrashane (whose price fell by 0.65p/l). The Fane Valley base price was down by just 1p/l from August, while Ballyrashane’s dropped by 1.3p/l.

The occupiers of the bottom three places in the league remain unchanged, although the September price paid by Glanbia Cheese was closer to the Dale Farm Red Tractor price and gained ground over the United price relative to the previous month. Glanbia’s price was down just 0.34p/l month on month, while United/Dale Farm fell by 0.62p/l (after adjustments for compositional quality).

In our league table, the prices for September milk are after deduction of transport charges applicable to a supplier of 500,000 litres per year with average NI seasonality of supply and with average September milk quality of 4.12% butterfat, 3.35% protein, 4.60% lactose, TBC of 17 and SCC of 213. The August components were 3.98% fat and 3.24% protein.

The linkup with Glanbia Milk continues to look good for the members of Fivemiletown Co-op, with their ex-farm milk price at the top of the league for another month. At over 27.4p/l, their price was more than 1p/l above the bottom four prices in the NI milk league for September.

Aurivo Co-op’s price was the only other above 27p/l in this league and remained the best available price for milk collected daily.

First Milk producer co-op in Britain also paid over 27p/l for comparable milk bought under the same conditions. A cut of 3p/l for October milk has been indicated by First Milk.

Prices paid across a range of milk qualities (Table 1) from two different sizes of producer (Tables 2 and 3) indicate the extra income available for good quality milk. Glanbia Milk, Fivemiletown Co-op and Aurivo/Donegal occupy most of the top three positions across the range, followed by Lakeland Dairies. The prices paid by Fane Valley across this range are generally in the top five and above those of Town of Monaghan for all of the categories compared.

Rolling averages still over 31p/l

Almost all of the rolling 12-month weighted average prices remain above 31p/litre for average quality milk (Tables A and B). These prices are all above the prices paid in the previous 12 months but it is noteworthy that the period from October 2012 to September 2013 also saw average prices from all of the buyers over 30p/l.

This has been a sustained period of relatively strong milk prices, albeit through a period when costs of concentrate feeds and other production costs have been high.

With prices for September 2014 having fallen into the region of just over 25p/l and, as milk prices continue to fall, the rolling averages will drop below 30p/l before the end of 2014. Producers need lower costs of feed and other cost reductions, where possible, as margins come under pressure. The prices shown in Tables A and B are after deduction of transport charges for milk supplied on the average seasonal pattern in NI.

The rolling average prices paid by milk buyers in NI over the past year remain well above the comparable prices paid by First Milk producer co-op in Britain.

Dale Farm cheese for Japanese market

Dale Farm, has secured its first cheese export deal in the Japanese market.

The company has announced a significant contract with major food manufacturer Hoko Co Ltd. Dromona cheddar will be among other natural cheddar cheeses imported by Hoko, which is then processed to create cheese products suited to the tastes and dietary preferences of the Japanese consumer.

Hoko Co Ltd sells dairy and frozen foods into the retail, wholesale and catering sectors.

Representatives from the company visited Dale Farm’s cheddar production facility at Dunmanbridge, Cookstown, earlier this year. The contract announcement was made by Dale Farm at the global food exhibition SIAL in Paris last week.

Commercial director Stephen Cameron says that there is a substantial export growth opportunity for Dale Farm, as the amount of dairy being imported by Japan has increased by over 20% in the past year.