The majority of the Irish co-ops followed up the first six months of milk price cuts with another 2c/l cut for July milk.
This brings the average league payout to €4.94/kg milk solids (35.1c/l) in old money.
Kerry Group didn’t cut July milk price and held what it paid out in June, but it is almost €10,000 adrift of the west Cork co-ops when we tally the cumulative payout from January to July inclusive.
Tirlán suppliers were hit hardest with a 2.5c/l cut on June price taking them to €4.75/kg milk solids or just under 34c/l in old money (excluding VAT at base solids).
Lakeland suppliers were hit with a 1.8c/l July price reduction and that takes it to the floor in terms of the cumulative year-to-date payment.
It now matches Kerry Group at the bottom in terms of the money paid out to date in 2023 for the typical spring-calving milk supplier.
This time last year (July), the average milk price was 54c/l (like-for-like comparison) and the 20c/l slide to get the average price to 34c/l started in January 2023.
Some might say a 34c/l base price doesn’t sound bad.
However, given where farm costs have gone in the last three years, this year’s 34c/l is more like the equivalent of a 20c/l milk price that we had eight years ago when milk price averaged 23c/l in July 2016.
So, there is a case to say this milk price is the worst milk price in the last 10 years.
Internationally, commodity dairy markets haven’t stabilised yet, so potentially more pain is likely over the coming months.
However, this depends on the exposure of co-ops or how deep co-op directors are willing to support milk suppliers by eating into reserves or looking at alternative cost-cutting measures.