LacPatrick have made a significant price cut to their February milk price, taking it down 2.4p/l to 27p/l.

This puts the co-op on the lowest base price for February milk. Glanbia Cheese is on 27.5p/l, with all the rest on 28p/l.

LacPatrick maintains that the decision to go to 27p/l is one not taken lightly by the board, but the price is reflective of what markets are currently returning.

“It is a challenging time for markets and it is a challenging time for farmers. We have been alerting our suppliers for a number of months that the market returns are way out of line with the farmgate price,” said LacPatrick chair Andrew McConkey. The expectation is that the price should hold at 27p/l for March supplies.

Meanwhile, Aurivo also set its price for February this week, and followed the same trend as other processors with a 1p/l reduction to a 28p/l base.

Full analysis on milk pricing will be detailed in next week’s milk league.

Markets

This week’s GDT auction was down 1.2% on early March, reducing the price index to US $3,632/t. That drop came despite a big reduction in the volume tendered for sale.

Market analysts had hoped that there would be a positive outcome at Tuesday’s auction after news that milk production in New Zealand was down 2% in February and 5% in January when compared with the same months in 2017.

However, increased production in the US and EU has offset the reduction in New Zealand production.

Butter prices were unchanged with a small increase in whole milk powder. However, cheddar prices fell 3.9% to $3,609/t with skim milk powder falling 8.6% to $1,887/t.

The drop in SMP prices was the main contributor to the negative auction and is a reminder that it is likely to remain a barrier to higher milk prices in 2018.

At this week’s Dutch Dairy Board auction, butter prices fell €20/t to €4,780/t.

WMP also fell by €20 to €2,570/t with SMP unchanged on €1,290/t. WMP has fallen from €2,620/t at the start of March with SMP down from €1,320/t.

The latest UFU milk price indicator (MPI) is at 27.47p/l, while the Ornua milk price index in the Republic of Ireland converts to a price of 26.1p/l.

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Us milk production increases in February