Glanbia sets August milk price
Glanbia members will see no change in August milk cheques thanks to a balancing act between base price and co-op support.

Glanbia Ireland has increased its base milk price for August, but an equivalent co-op support payment is coming to an end.

Its manufacturing price at 3.6% fat and 3.3% protein now stands at 30.4c/l excluding VAT, up 1c/l on July's level. However, there will be no 1c/l Glabia Co-op support payment this month.

Glanbia chair Martin Keane said: “The market outlook remains cautious. The level of milk supply from the main exporting regions will be a key factor determining the price outlook over the coming months.”.

On Tuesday, Lakeland Dairies announced it was holding its milk price for August.

The PPI index of dairy commodity prices compiled by Ornua showed a 3.5% increase that month.

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Dairy markets: continued progress on intervention stocks can boost markets
If the European Commission can continue to offload its SMP intervention stockpile in the coming months, it could be a real boost to dairy markets in 2019.

As we turn into the final weeks of 2018, dairy markets in Europe are extremely quiet, with almost all business done for dairy buyers ahead of the critical Christmas period.

However, the European Commission continues to make steady progress in offloading its remaining stocks of skimmed milk powder (SMP) held in intervention, which should have a major impact on shaping dairy pricing into 2019.

Total volume sold

At the most recent tender sale of SMP, the European Commission sold a further 30,000t of its SMP intervention stockpile at a minimum price of €1,251/t.

This brings the total volume of SMP sold out of intervention by the European Commission since January this year to just over 190,000t, leaving a further 190,000t of SMP left to be sold.

If the European Commission can continue to work through its SMP stockpile over the coming months, it could have a major impact on the performance of global dairy markets in 2019.

The significance of a total clearance of the European Commission’s SMP stocks cannot be understated.

Having peaked at 380,000t, the SMP intervention stockpile has acted like a deadweight on global milk powder markets for the last three years. Should the European Commission continue to sell large chunks of its SMP stocks over the coming months, it has the potential to breathe new life into milk powder markets next year and see prices rise to more normal levels once again.

Dairy markets: dairy prices improve but little product is trading
Dairy commodity prices across Europe have shown some upward momentum in the last week, as the seasonal milk curve begins to wind down.

Looking at spot markets over the last week, European dairy prices would appear to have found some much-needed upward momentum, with spot prices for butter holding firm, while prices for cheese, skimmed and whole milk powder all posted weekly gains.

After almost 10 weeks of falling prices, butter markets across Europe appear to have bottomed out in the last week. European butter prices stood at between €4,300/t and €4,350/t on spot markets last week, which is steady compared with the previous week.

Up to this, butter prices had been declining week on week for more than two months, as dairy markets weakened across Europe.

On cheese markets, spot prices have firmed over the last week.

Spot prices for cheddar rose as much as €100/t last week above €3,000/t, while gouda and mozzarella prices were also improved.

On powder markets, prices have also shown some improvement, although returns remain weak overall.

Skimmed milk powder (SMP) prices lifted €50/t in the last week above €1,600/t, while whole milk powder (WMP) prices increased above €2,600/t.

While prices look to be improving in Europe, the reality is that very little physical product is actually changing hands right now. Dairy buyers have nearly all their buying done for the important Christmas period by now and the market is said to be extremely quiet across Europe right now.

Meanwhile, in the Netherlands, Friesland Campina has cut its guaranteed milk price for November by 1c/litre to 38.4c/litre.

October milk cheques up €40m
Our milk supply survey results this week report milk volumes up at least 20% for October, writes Jack Kennedy.

Results from our survey of all the main milk processors this week show that October milk supply will be up over 20% for the month, compared with the same period last year across the country.

Some processors are up by close to 30% for the month. Milk supply held up well as grazing conditions were excellent and farmers continued to supplement.

The percentage increase is further emphasised by the fact that October milk supplies for the second half of October 2017 were reduced as storm Ophelia moved across the country.

Last year, the Central Statistics Office reported that October 2017 domestic milk intake by creameries and pasteurisers was estimated at 536m litres.

If our estimated survey results for October 2018 are confirmed by processor returns, then on average there were an additional 107m litres produced by farmers in the month.

At a milk solids percentage of 8.5%, that would be an additional milk solids of more than 9m kg – which if valued at €4.38/kg (31 c/l), puts an additional €40m of extra output into October milk cheques compared with the same month last year (€2,200/supplier).

Dairygold, Kerry, Arrabawn, and Lakeland report volumes up 20%.

The west Cork co-ops are up by between 25% and 30%.