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November milk cheques have landed and again the majority of big players have held milk price one way or the other. However, some co-ops have come under more pressure and dropped price further. Aurivo dropped 1c/l on the back of a 1 c/l drop in October. It means the co-op falls off the bottom of the monthly league table and is over 1 c/l behind the other two players in division four and 4.7 c/l off the west Cork co-ops.
Near neighbour Lakeland dropped price also (0.13 c/kg MS or 1 c/l), but, for November it is 2c/litre ahead of Aurivo. Aurivo argues the best price should be in the peak months but looking back into the May league Aurivo was also 1c/litre behind Lakeland. It came up to match Lakeland in June. The other big mover was Glanbia, which dropped 2 c/l off base price for October but brought in co-op funds to fill the gap.
Tipperary Co-op suppliers won’t be happy to see price reduced for November. They are only one step up from the bottom of the league table. This price excludes the 3c/l top-up that is paid on November supplies to those qualifying farmers depending on peak to trough supply. North Cork Co-op dropped base price a touch also (it might be needed to pay for Newtownsandes, I suppose). While the volumes processed in November are up 20% or more compared with the same month in 2017, the volumes are still relatively small and this has helped the big players hold price for November. Aurivo, Lakeland and Glanbia are probably buying that bit more milk at this time of the year than some of the rest and hence have had to react. Tipperary Co-op have their own in-house issues to deal with.
While November supply for most farmers is reducing, the fact remains for this month alone the difference between top and bottom in milk price means there is €950 less in the milk cheque. IFA national dairy chair Tom Phelan said the decision by Aurivo, uniquely among co-ops, to cut its milk price for a second month running was a real let-down for suppliers at a time when markets and the outlook for 2019 justifies milk price stability. Phelan said this decision was major blow, particularly in what has been a very difficult year for farmers. It was crucial that Aurivo would outline to farmers what their plans are to returns the optimum milk prices in 2019.
Remember conditional bonuses are not included in this league ranking as the objective is to try to compare the prices on a like-for-like basis. So the farmer might actually get more in the milk cheque if he/she achieves all the quality parameters, gets conditional bonuses etc. The west Cork co-ops have a 0.88 c/l bonus for milk with fewer than 200,000 cells/ml.
The bottom line is the gap that was there in October has widened for November. As you can see in Figure 1, if we use the national average figure to compare between co-ops, we can see the Drinagh milk cheque for November comes in at €7,200 for the average herd, while the Aurivo cheque falls to €6,250 for the month.
The average price for the main table is €4.33/kg MS which is equivalent to about 30.8 c/l at 3.3% protein and 3.6% fat ex VAT. Weighted for volumes per processor (because only 5% of national milk is in west Cork) the average is probably closer to €4.25 so in effect the base price ex VAT at 3.3% protein and 3.6% fat is closer to 29.7 c/l ex VAT.
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