LacPatrick Co-op pays an unconditional bonus of 3 c/litre for January and February on all manufacturing litres supplied. It means the recently merged co-op (Town of Monaghan and Ballyrashane) is pushed to the top of the January and February monthly milk league. For February, they are sitting pretty at the top, paying out €3.60/kg MS (25.8c/litre). LacPatrick actually cut the base price for February by 1c/l but the February bonus keeps them at the top of the February league (below).

Aurivo also pays an unconditional February bonus of 1.5c/l. This helps Aurivo remain in division two, with the west Cork co-ops, despite a cut in the base price for February. Aurivo cut the February base price by 1c/l but compensated with a 1.5 c/l unconditional February bonus.

Dairygold Co-op moved down significantly. Dairygold cut its February milk price by 1.4c/l. It means the Cork based co-op is now rock bottom of the league, all on its own in Division four, as base price excluding VAT falls to €3.25/kg MS (23.2 c/l). The Dairygold February price cut will be seen as leading the price down for 2016 as spring supplies start to flow for the new milk year.

Glanbia is not that far ahead of Dairygold with a base price of €3.31/kg MS but Glanbia is paying out a much higher price on over 20% of its manufacturing supply pool which it doesn’t get credit for in the monthly milk league. It will get credit for this in the annual KPMG/IFJ milk price review. However, if you are a Glanbia supplier with none of your milk supply fixed as part of the voluntary fixed milk price scheme, you will be feeling the harsh winds of the poor base price.

In general, the other players all held the January price for February so they remain more or less where they were for the January league. Arrabawn is putting it up to near neighbours (Glanbia/Tipperary/Dairygold and Aurivo) for 2016 as they paid a good price of €3.44/kg MS for January and February. The Nenagh-based co-op is mixing it with the west Cork co-ops in division two this month for the second month in a row. Again Arrabawn suppliers would get a 2c/l bonus on February milk supplies if they supply 4% of their annual supply in February.

The small North Cork co-op based out of Kanturk has moved to paying farmers on the A+B-C formula, sending the clear signal that they want milk solids as opposed to additional watery volume. The decision is a good one by the board and management. February 2016 is the first time that suppliers are getting paid on this new formula and it means there are just two small processors in the monthly league not paying on milk solids (Boherbue and Centenary Thurles).

Remember the monthly milk league excludes conditional bonuses such as the winter bonuses that LacPatrick and Lakeland offer. Tipperary also offer a conditional 3c/l February bonus based on supply relative to peak supply. This is not counted in the monthly league.

The other big change first initiated in the January league table is the change in the base fat and protein percentages. In calculating milk solids we use the percentages for fat and protein supplied in the previous year. The percentages increased to 3.49% protein and 4.11% fat during 2015 so the league uses these figures now.

The big Dutch player FrieslandCampina (over 10bn litres processed) has cut its guaranteed farmgate milk price for April by 1 c/l to 27.5c/l.

In a statement on its website, Friesland suggests part of the decrease in the guaranteed price is the result of a negative correction of 0.22c to compensate for the February forecast of the milk prices of the reference companies, which were estimated too high. It continues that the expectation is that the milk prices of the reference companies will continue to drop in April. It says this is due to the low level of foil cheese prices combined with sluggish demand and an increasing supply of milk.

The guaranteed price of 27.5c/l applies to milk with a protein content of 3.47%, a fat content of 4.41% and a lactose content of 4.51% and is exclusive of VAT. The amounts shown apply to an average supply of 600,000kg of milk annually.

Remember the annual milk price that FrieslandCampina pays its member dairy farmers comprises the guaranteed price, the special supplements, the meadow milk premium, the performance premium (together with the cash price) and the distribution of member bonds (registered reserves). The price paid for milk is based on the value of the supplied kilograms of protein, fat and lactose in the ratio 10:5:1. The FrieslandCampina performance price comprises the milk price plus the interest on member bonds and the addition to the company’s retained earnings. All amounts are exclusive of VAT.

There was some good news in the last few weeks showing increased powder buying from Chinese buyers in January and February and that no doubt is going some way to stabilising the GDT auction. The price of oil rising again should be seen in a positive light for those looking to increase product price.

New Zealand recently revised farmgate milk price downward and effectively dairy farmers there will be paid the equivalent of 17c/l, which is a long way from what they have been used to for the last ten years.