Most Irish milk processors have confirmed to the Irish Farmers Journal this week that they supported monthly milk price by between 2c and 3c/litre on average in 2015.

In total, this means global market returns were supported by over €100m during the course of the year. This equates to about €80 per cow on Irish dairy farms. The net result will mean the average 2015 milk price paid to Irish dairy farmers will come in at over 30.0c/litre, which processors claim is higher than direct product market returns in 2015.

In response to questions from the Irish Farmers Journal, all processors said the first half of 2016 would be challenging and suggested milk price will depend on global milk supply and particularly European milk supply stabilising. However, the strength of butter and cheese and a strong US dollar were helping market returns and the hope is that will continue into 2016. There are tentative signs that Chinese demand for powders is rising.

Dutch brakes on

There was industry surprise on Monday when large Dutch processor Friesland Campina introduced a 2c/litre bonus to suppliers who maintain or cut production for the first six weeks of 2016 compared with a supply reference period (13 to 27 December). The aim is to reduce supply because processing capacity is temporarily unavailable.

Closer to home, Dairy Crest has finally exited the UK dairy sector with the completion of its sale to Germany’s Müller Group after a year-long competition authority review. Chief executive Mark Allen is reported to have said milk production is better off in the hands of co-operatives or private companies rather than publicly quoted companies.