All of the main buyers of milk in NI have raised their base prices for August milk by 1p/litre, except for LacPatrick increasing by 1.25p/l over their July price. This brings it more into step with the other buyers after its currency advance rise in June and subsequent small increase of 0.25p/l for July milk (Table 1).

The latest month-on-month increases for milk in the Republic of Ireland are between 1c/l and 2.5c/l.

Of those buying milk on both sides of the Irish border, the biggest rise is 2c/l at Glanbia Ingredients Ireland, followed by 1.5c/l at Aurivo and 1c/l at LacPatrick and Lakeland Dairies. These increases bring all of their southern milk prices to 23.7c/l, apart from Aurivo on 23.2c/l, excluding VAT. That is for milk with 3.3% protein and 3.6% fat and the price of 23.7c/l is equivalent to 20.14p at an exchange rate of €1 equal to 85p.

In NI, apart from Strathroy Dairy on 20p/l, Dale Farm’s Red Tractor milk price is the only base above 19.5p/l. For direct comparison of prices for the farm-assured milk, the inclusion of the LacPatrick Red Tractor bonus of 0.2p/l puts it on 19.2p/l base price for milk from the qualifying farms and the 0.4p/l bonus from Glanbia Cheese puts its base at 19.15p/l for Red Tractor milk.

The Irish Farmers Journal understands that the Glanbia Cheese base price in future will be the figure applying to Red Tractor milk and there will be a reduction of 0.5p/l for any milk that isn’t Red Tractor farm assured.

A widening of the gap between farm assured and other milk is one of the means by which Dale Farm managed to bring its milk supply to practically 100% Red Tractor.

Looking at base prices for August 2016 compared with 2015, it is noteworthy that all (except Strathroy) are up from the level of a year ago. However, it should be noted that Strathroy’s August 2015 base price of 20.5p/l was more than 2p/l ahead of the other buyers except Dale Farm at that time. This reflects the Strathroy business focus on liquid milk and cream for sale mostly to retailers.

The closing of the price gap now apparent between Strathroy and the other buyers follows the positive trend in dairy commodity prices over the past few months, led by demand for butterfat in particular and some reduction in milk output in Europe. This has seen EU prices for butter rise from just under €300/100kg in early June to slightly over €400/100 kg today (official Dutch Dairy Market prices).

Over the same period, prices for skimmed milk powder have increased from €168/100kg to €201/100kg and whole milk powder prices from €200/100kg to €268/100kg.

In August 2015, the comparable prices (official Dutch Dairy) were just under €270/100kg for butter, €165/100kg for SMP and €190/100kg for WMP. The recent increases should provide for further rises in milk prices ex-farm above those seen for August.

Meanwhile, the step change in milk output in Britain has left some processors short of anticipated supplies of cream and milk and pushed spot milk prices above 35p/litre for the small volumes available through secondary trading. According to Irish Farmers Journal sources, some milk from NI has been shipped to Britain in recent weeks to take advantage of that spot market demand.

There will be further comparison and analysis of quality adjusted prices paid for August milk in the NI milk price league next week.

Milk strike a possibility – FFA

Recent statements from processors that they want more milk without mention of a sustainable price, has prompted outrage, according to William Taylor from Farmers For Action (FFA). “It is in this context that FFA’s NI steering committee has decided FFA will hold a milk crisis meeting in late November or sooner depending on the response from the milk buyers,” said Taylor.

He maintained that unless milk prices start to rise month on month, with 40p/l confirmed for December, a vote will be taken at the FFA meeting on whether to strike.

With milk in short supply and the option available of the EU milk reduction scheme, he said that NI farmers have nothing to lose by striking. “NI farmers are in the driving seat where they now have the power to deliver fairness at the farmgate,” he said.