Despite recent positive movement in dairy commodity prices, both Dale Farm and Glanbia Cheese have taken 1p/l off their base price for milk supplied in December.

That leaves Dale Farm paying from a base of 26p/l, which includes its 0.3p/l loyalty bonus, and Glanbia Cheese on a base price of 25.5p/l. Both processors pay a 2p/l winter bonus in December.

While two of our largest buyers cut base price, others held, with Lakeland remaining on 26.5p/l plus an additional 3p/l winter bonus, putting it effectively 1.5p/l ahead of Dale Farm and 2p/l ahead of Glanbia Cheese.

Strathroy also held on 26.5p/l, with an additional 1p/l winter bonus, while Glanbia Milk/Fivemiletown is on an all-in price of 26.5p/l.

Markets

The move to cut base prices by some buyers has left farmers questioning where base prices will settle this spring and also why cuts are being applied at all.

Dairy commodity prices have been improving during December and January, and in addition there is growing expectation that EU intervention stores will be empty of skim milk powder by March, which should help improve the price of fresh product.

Tuesday’s New Zealand GDT auction saw the index rise by 4.2% to US $3,057/t, the fourth positive auction in succession, with significant rises in the value of skim and whole milk powders, as well as butter.

Prices for skim milk powder at the Dutch Dairy Board auctions are now at their highest level since June 2017, with whole milk powder and butter also rising to levels last seen in early autumn of last year.

Reflective price

Reacting to that, the chair of the Ulster Farmer’s Union (UFU) dairy committee, William Irvine called on local processors to recognise the upturn in commodity markets and pay a price which is reflective of this.

“The time has come for processors to step up to the mark when setting base prices. The GDT auction has delivered its fourth consecutive price increase. The market has strengthened so there is no reason why farmers here shouldn’t see that reflected in their milk cheque,” said Irvine.

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