Butter prices are running 40% ahead of this time last year and skim milk powder (SMP) prices are running 30% ahead of this time last year.
As Ireland enters peak milk period, these prices will underpin the market, as all processing capacity is flat out making product and there is little choice to move milk from one higher-producing product to another.
Kerry Group was first out to set April milk price, holding the same as it paid in March at 32.3c/litre ex-VAT at 3.3% protein and 3.6% fat.
Glanbia followed, again holding at its March price of 32.8c/litre ex-VAT at 3.3% protein and 3.6% fat.
That’s a base of 32.35c/litre plus the share of GI profit.
There were expectations that April milk price would increase again given that the Ornua PPI lifted again last week and dairy commodity markets remain strong.
Holding the April price in Kerry means its base price is 2.5c/litre off the Ornua equivalent price.
Kerry is not a member of Ornua, but it does some trade with Ornua.
Most recent stats show US milk production is up relative to last year by about 2%.
This is quite significant as it’s a huge market, but, thankfully, it isn’t a huge player on export markets. However, if supply continues above 2020 it will affect global markets.