Record milk prices in NI have been followed by a record monthly price cut, with both Lakeland Dairies and Dale Farm taking 5p/l off for milk supplied in January.

As well as being the largest single price drop ever recorded in NI, it is also the first time since April 2020 that any processor has cut its monthly base price, although back then, a more modest 1p/l reduction was applied.

Both co-ops also pay a winter bonus in December, so for a Lakeland supplier the January price is effectively down 8p/l, while for a Dale Farm supplier it is a 7p/l reduction. Dale Farm suppliers are now on a base of 43.05p/l.

The Lakeland January price is down to a base of 42.5p/l to include a 1.5p/l support payment payable on all milk including that in fixed price schemes.

For a 1 million litre Lakeland producer supplying approximately 80,000 litres last month, January milk sales are down by close on £6,400 compared to December.

ROI price

In the Republic of Ireland (ROI), Lakeland has cut its base price by 6c/l to 50.09c/l. This converts to a sterling equivalent of 44p/l for milk produced at base constituents of 3.3% protein and 3.6% butterfat.

However, when adjusted to the NI base of 3.19% and 3.85% for protein and butterfat, Lakeland’s ROI price is around 1.7p/l ahead of that in NI, although that calculation does not allow for volume bonuses which are paid in NI, but not in ROI.

The co-op is also discontinuing its 7p/l support payment on fixed price milk for 2023, although Dale Farm will continue to pay its 4p/l top-up on all fixed price agreements until the end of 2023.

Strathroy

Outside of the two largest co-ops, Strathroy was the only processor to declare a January price by Wednesday. Its price is down 2p/l to a base of 45.5p/l once a 1p/l winter bonus is added in.

Further corrections

The message from all NI milk buyers is that further sharp price corrections are coming this spring in response to commodity markets consistently trending downwards since autumn 2022.

Butter and milk powder prices are currently similar to market values recorded in October 2021. Back then, base prices were in the region of 31p/l to 32p/l.

Reaction

Commenting on the price reductions, Farmers For Action in NI described the cuts imposed by Lakeland and Dale Farm as “totally unjustified”.

“Why is more effort not put in to helping keep the price up to give family farmers a chance to pay their bills?” asked FFA co-ordinator in NI, William Taylor.

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