Despite all of the co-ops increasing milk price for February, the February payment won’t settle too many of the bills mounting up on farms as a result of the bad weather.

All of the co-ops increased prices for February by between 0.5c/l and 1.5c/l and some of the co-ops offered rebates on feed purchases through the co-op-owned businesses but these aren’t included in the milk league.

The winter supply bonuses that were a feature of December and January supply are still a feature in February, with many of the co-ops offering a bonus of between 2c/l and 3c/l for February supplies.

This is bulking up the base prices of these co-ops and while the chest may be out now, the question to be asked is will these co-ops still be at the top of the league come the peak months?

National supply

When it’s all said and done, it doesn’t cost much to pay a high price in February because supplies are low.

We work it out at 4.2% of total supply in February based on the three-year average national supply. The pressure will be on the co-ops paying an early calving bonus to convert that to base milk price next month.

Dairy markets are extremely volatile at present. Butter prices, in particular, started soaring in February, gaining €730/t in the space of a few weeks but that positivity has now switched the other way and half of the gain was lost since the start of March.

The GDT has also fallen a combined 5.1% at the last two auctions.

Because Irish stocks are low, these market developments won’t have had much effect on Irish co-ops one way or the other, but it does point to a potential bumpy ride for milk price over the peak months and beyond.

The methodology that Ornua uses to calculate the PPI has changed for February.

The deduction for processor costs has increased, meaning the milk price indicator is lower than it was. For January and February, the milk league is showing a higher price than the PPI.