Lakeland Dairies boss Colin Kelly says he is optimistic that milk prices could increase further in the second half of the year.

Speaking to the Irish Farmers Journal ahead of the publication of the annual report for 2023, Kelly said that the combination of lower global supply and the expected reduction in interest rates points to higher prices later this year.

“We don’t see any major change barring some geopolitical event happening, but at this stage the market has already factored these shocks in,” he said.

According to the CEO, the current milk price is ahead of where the market is at currently, but the co-op wants to pay out as much as possible to support farmers through this low margin period.

He said he expects milk price to remain in the low to mid 40s in terms of cent per litre for the next few months.


On derogation changes, Kelly says the Lakeland catchment is less exposed to potential cuts in the derogation compared to other regions, but acknowledged that they have not surveyed suppliers to see their exposure.

“We need to see the Government plan for retaining the derogation. We had a meeting with Minister McConalogue over it and while we got a reasonable degree of comfort, we need to see the plan. It looks like there’s a bit of a vacuum there at present.

“Farmers are making breeding decisions now for the next two to three years, so they need clarity on what is going to happen.”