The co-ops on the west coast and midlands moved up again on August milk price to further reinforce their lead on the southern and eastern co-ops in the August payout.

Aurivo, Arrabawn and Lakeland Dairies all increased August payout by including the unconditional input bonus on top of the base milk price.

Kerry also included a 1.5c/l August bonus on August milk as part of what they say is their “contractual” agreement, and it took them from near the bottom in July into the top of division two in August.

Interestingly, Kerry also introduced a new fixed milk price at between 48c/l and 50c/l for March to October 2023, alongside a new fixed price adjuster on feed and fuel.

The adjuster is upward only, meaning there will be no reduction in fixed price, but feed and fuel are only two of the big costs on farm.

Kerry suggests a €50/t feed increase above the reference will lift milk price by 1c/l, while a 50c/l fuel increase will lift fixed price by 0.26c/l on milk.

Tirlán (Tirlán), Dairygold and the west Cork Co-ops held for August. The positive news for Tirlán suppliers during the Ploughing week was the board decision to row back on supply restrictions and to open the door to new entrants again.

Tirlán supply year to date is back, give or take 2%, similar to Dairygold Co-op. This is in contrast to milk suppliers in the northwest who have increased supply, with Lakeland supply up 4% to 5% year on year.

Commodity market

The power of the commodity market for butter and skim powders continues to show market dividends over the cheese basket for the likes of Carbery.

Despite holding August price, Dairygold Co-op still ranks highest on the cumulative payout to date for 2022.

Average league price is now €7.60/kg MS or 54.3c/l excluding VAT (57c/l including VAT).

The flat-rate VAT reduction in the budget this week from 5.5% to 5% will reduce milk price returns. In January, the rate went from 5.6% to 5.5%.