The last three months have surely been the worst for milk price in memory. The sheer scale of the drop, when you consider that a kilo of milk solids was making €6.50 on average in July and is now worth only €5.30 by October. That’s an 18% drop over three months and the co-ops are indicating that they are still paying above the market price.
The bad news is that dairy markets are continuing to fall, so the bottom in the market hasn’t been reached yet. European butter prices fell over the last two weeks by €425/t and butter is now trading for less than €4,500/t – that’s just shy of €3,000/t less than the price for most of the summer.
The only good news, in a time when good news is scarce, is that the futures market for butter isn’t pricing in any further price drops, with increases expected towards the middle of next season. While the price drop for butter has been more severe than for other commodities, cheese prices and powder prices have all tumbled in recent months and there is growing talk of EU intervention being needed for skim milk powder.
It’s important to have that context when analysing what is happening to farm gate milk prices. However, there are big differences in milk price between the co-ops, which is strange given the product mix is not too dissimilar across the board.
Almost all of the co-ops dropped price by the same amount, in or around 50c/kg MS. North Cork Creameries dropped price by the most, taking 59c/kg MS off its price. Dairygold dropped by the least amount, taking 43c/kg MS off its price, but both co-ops are still in division three. As normal, the west Cork co-ops are out in front, with division one all to themselves.
There is a 20c/kg MS difference between the Carbery price and the next nearest contender, Kerry Dairy Ireland. Speaking at Dairy Day two weeks ago, KDI’s Pat Murphy said the consumer brands are going well for them.
Next is Boherbue, which is on an index-linked milk price, as most of its supply goes to the Mondelez chocolate factory in Rathmore. Aurivo is mid-table, paying around 10c/kg MS more than its neighbours, Lakeland and Arrabawn Tipperary.
The milk league ranks processors by price, not scale. With two of the largest co-ops in the country, Tirlán and Dairygold at the bottom of the league, about half of all milk produced in Ireland is getting the lowest price. The difference in payment between suppliers at the top and bottom of the league is over €2,200 excluding VAT for October alone.
The last three months have surely been the worst for milk price in memory. The sheer scale of the drop, when you consider that a kilo of milk solids was making €6.50 on average in July and is now worth only €5.30 by October. That’s an 18% drop over three months and the co-ops are indicating that they are still paying above the market price.
The bad news is that dairy markets are continuing to fall, so the bottom in the market hasn’t been reached yet. European butter prices fell over the last two weeks by €425/t and butter is now trading for less than €4,500/t – that’s just shy of €3,000/t less than the price for most of the summer.
The only good news, in a time when good news is scarce, is that the futures market for butter isn’t pricing in any further price drops, with increases expected towards the middle of next season. While the price drop for butter has been more severe than for other commodities, cheese prices and powder prices have all tumbled in recent months and there is growing talk of EU intervention being needed for skim milk powder.
It’s important to have that context when analysing what is happening to farm gate milk prices. However, there are big differences in milk price between the co-ops, which is strange given the product mix is not too dissimilar across the board.
Almost all of the co-ops dropped price by the same amount, in or around 50c/kg MS. North Cork Creameries dropped price by the most, taking 59c/kg MS off its price. Dairygold dropped by the least amount, taking 43c/kg MS off its price, but both co-ops are still in division three. As normal, the west Cork co-ops are out in front, with division one all to themselves.
There is a 20c/kg MS difference between the Carbery price and the next nearest contender, Kerry Dairy Ireland. Speaking at Dairy Day two weeks ago, KDI’s Pat Murphy said the consumer brands are going well for them.
Next is Boherbue, which is on an index-linked milk price, as most of its supply goes to the Mondelez chocolate factory in Rathmore. Aurivo is mid-table, paying around 10c/kg MS more than its neighbours, Lakeland and Arrabawn Tipperary.
The milk league ranks processors by price, not scale. With two of the largest co-ops in the country, Tirlán and Dairygold at the bottom of the league, about half of all milk produced in Ireland is getting the lowest price. The difference in payment between suppliers at the top and bottom of the league is over €2,200 excluding VAT for October alone.
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