Dairy processors based in Britain are paying significantly higher base prices for milk than counterparts in NI.

MÜller will pay a July base of 38p/l under its advantage initiative, which requires suppliers to meet several environmental parameters. A 1p/l price cut will apply for August.

Arla will pay a base of 35.12p/l for manufacturing milk during July, while First Milk has confirmed a base of 36.85p/l for both July and August.

While those prices are 5p/l to 7p/l higher than the most recent milk prices paid by NI processors, base prices cannot be directly compared.

In Britain, base prices for manufacturing milk are set at 4.2% butterfat and 3.4% protein; significantly higher than the traditional 3.85% butterfat and 3.18% protein in NI.

Adjusting fat and protein back to NI base constituent levels lowers base price in Britain by approximately 1.75p/l. Deductions for milk collection also need to be factored in for some processors.

Approximately 50% of milk in Britain is sold into liquid markets, meaning the industry is less exposed to movements in commodity prices than processors in NI.

Official price gap

Data collated by the Agriculture and Horticulture Development Board (AHDB) shows the average farmgate milk price for April to farmers in Britain was 40.58p/l, compared with 34.05p/l in NI.

March saw farmers in Britain paid 44.96p/l , compared with 37.2p/l in NI, while in January and February, prices averaged 50.46p/l and 48.61p/l, compared with 44.76p/l and 40.39p/l for NI.

GDT

Meanwhile, the first GDT auction for July ended with a 3.3% fall in the index price, making it nine negative results across 13 auctions this year.

Butter price plummeted 10.3%, while cheddar fell 3.1%. Skim milk powder dropped 6%, with whole milk powder down 0.4%.

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