Lakeland, the first processor to announce May milk price, has cut by 1.5 c/litre at 3.3% protein and 3.6% fat. However, it has added a one-off 1c/l Ornua bonus for all suppliers, meaning the price has dropped to 22.76c/litre excluding VAT.

On Wednesday last week the IFA national dairy committee met to ramp up pressure on co-ops, especially those at the bottom of the league, to take a leaf out of the Friesland Campina book and hold their milk price.

Sean O’Leary, dairy committee chair, said there is now clear evidence that international dairy markets are strengthening from their unsustainably low levels. Co-ops have recognised on the record that they will continue to need to support milk prices, and in the short term, this has to mean holding for May milk.

“Cash flow is lacking on most dairy farms at this stage. The milk price is at a historical low of anywhere between 21.3c/l + VAT and 24c/l + VAT, according to the April Farmers Journal Milk League, and input bills, superlevy and loan repayments all have to be found from what are now negative margins on the majority of dairy farms,” Mr O’Leary said.

Dairy markets moving upwards

There is no doubt now but that dairy markets are moving upwards. Trends are very definitely upwards for butter and cheese.

Large Dutch processor Friesland Campina has released a statement explaining it was going to increase the sales price for cheese and that it had been paying an ‘irresponsibly’ low milk price to Dutch farmers for months.

Call for supply controls

Meanwhile, France, Germany and Poland are calling for an EU-wide milk supply control mechanism. Signed by the agriculture ministers of France, Germany and Poland last week, the Warsaw Agreement contains a number of proposals to address the dairy sector crisis, including milk supply controls.

The French Minister for Agriculture Stéphane Le Foll and German Minister for Agriculture Christian Schmidt, together with the Minister of Agriculture and Rural Development from Poland, Krzysztof Jurgiel, will propose these new measures to address the dairy sector crisis at the next Farm Council meeting on Thursday 16 June.

Read more

PPI drops by 0.6 points for May 2016