Lakeland Dairies was the first to announce a price for milk supplied in August, increasing by 1.5p/l, bringing it to a base of 29p/l.

That price was matched by Glanbia Milk/Fivemiletown, which is up 1p/l, to a price of 28.4p/l. Adding in their 0.6p year-round bonus takes suppliers to a base of 29p/l before adjustments for volume and quality.

However, the company has also confirmed that a 1c/l bonus on all milk supplied in January to June 2017, announced by Glanbia Ireland earlier this week, will also apply to Glanbia Milk/Fivemiletown suppliers in NI. It is understood that the bonus is inclusive of VAT, so it will have to be adjusted, and also converted into sterling. However, it should still represent a significant boost to the August milk cheque.

Despite the rising prices paid to farmers, there is still frustration among some suppliers that the improved returns from the market are not being fully passed back to farmers.

Last week’s Dutch auction saw butter prices hit record highs of €6,950/t. The upward momentum in butter prices started late last year and current prices are just shy of €3,000/t more than the same period last year.

Meanwhile, UK milk price forecasts from the Agriculture and Horticulture Development Board (AHDB) suggest that prices could reach 40p/l by November, based on forward contract sales of butterfat.

Butter contracts for November 2017 were sold in August with prices rising week on week, while skim milk powder sales remained static.

As a result, dairy analysts at ADHB have revised their future milk price equivalent to 40.79p/l and 44.06p/l for November and December, respectively. These prices are before processing costs are factored in.

That market trend has been reflected in the latest milk price set by Dutch company FrieslandCampina, which has increased milk price by 2c/kg to 40.50c/kg for September.

NI average

In July 2017, milk produced in NI averaged 28.23p/l, its highest since August 2014, and slightly ahead of the average in Britain of 27.69p/l.