The link-up with Glanbia Milk is looking good for the members of Fivemiletown Co-op, judging by August milk prices. At almost 28.5p/litre, their price in the NI milk league for the month was a good 2p/l above the prices paid by Glanbia Cheese and United Dairy Farmers (without Red Tractor bonus) for comparable milk.

These August league prices are after deduction of transport charges applicable to a supplier of 500,000 litres per year with average NI seasonality of supply and with average August milk quality of 3.98% butterfat, 3.24% protein, 4.62% lactose, TBC of 18 and SCC of 218.

Compared with July, the improved compositional quality of the August milk has given a slight boost to the prices payable, although not nearly enough to counter the 1.5p/l to 2p/l drop in the base prices set by all buyers.

After topping the league for July milk, Aurivo Co-op’s price was a close third to the joint leaders for milk collected on alternate days and was the best available price for milk collected daily.

Town of Monaghan Co-op and Lakeland Dairies also managed to keep their price above 28p/l for milk collected on alternate days in this August league. They were almost 1p/l above the next best, Ballyrashane Co-op’s Red Tractor milk price of just over 27p/l inclusive of bonus of 0.2p/l.

That price and the four below it in the Northern Ireland milk league were less than the 27.26p/l or 27.76p/l prices paid by First Milk Co-op in Britain for comparable milk in August. Given that the volume of milk supplies throughout the UK and Ireland have been running well ahead of the corresponding months last year, most suppliers to First Milk are likely to have received the higher price as it relates to an increase in volume produced in the month.

The First Milk price was down by 1.5p/l for July and 1.25p/l for August. Further cuts of 0.5p/l for September and 3p/l for October have already been announced.

Among the August prices below 27p/l in NI, the Fane Valley figure of 26.8p/l was marginally above Dale Farm’s Red Tractor price, which includes a bonus of 0.4p/l. Below that, the price paid by Glanbia Cheese was less than 0.1p/l above the bottom placed 26.37p/l paid by United.

12-month average prices above 31p/l

While milk prices have been dropping each month since May, the rolling 12-month weighted average prices are still well above 31p/litre for average quality milk (Tables A and B).

This means that, collectively, prices for the past year are still above those of the previous 12 months.

But, in August 2013, all buyers in NI were paying over 33p/l for average quality milk. Now, we are looking at milk prices heading towards 25p/l or lower, so the prospects are for the rolling averages to drop significantly below 30p/l before the end of 2014.

The prices shown in Tables A and B are after deduction of transport charges for milk supplied on the average seasonal pattern in NI.

These figures indicate that the lowest of the rolling average prices paid by milk buyers in NI over the past year have been more than 1.3p/l above the comparable prices paid by First Milk producer co-op in Britain.

Marking World School Milk Day last week, the Dairy Council for Northern Ireland (DCNI) highlighted the importance of milk consumption for school children.

Approximately 60% of pupils in NI are making use of the EU scheme in which milk is offered at a subsidised rate. The DCNI is calling for this to increase by approximately 10% to ensure that more young people in nurseries, key stage one and two classes, benefit.

Dr Mike Johnston of DCNI said: “A carton of school milk provides children with a natural source of many nutrients needed for their good health and development.

“As well as being fantastic value for money, milk is a rich source of calcium, essential for healthy bones and teeth. A carton of break-time milk provides half of a five-year-old’s daily calcium needs. Milk also contains protein, potassium, iodine, phosphorus and B vitamins.

“It is important that we establish a routine for young people of drinking milk from an early age, so that they will continue this habit into adulthood and benefit from the fresh, local milk that is on offer. Break-time milk provides a great opportunity to do this, as well as offering children a good source of fluid to keep them hydrated and help maintain their concentration levels in the classroom.”

Initiatives

The DCNI has been involved in running initiatives in primary schools across Northern Ireland to make people aware of the benefits of milk for growing young people. Further information and advice about the importance of milk consumption is published on www.dairycouncil.co.uk

In spite of current difficult dairy markets, the pricing policies of most of the buyers based in the Republic of Ireland still seem to be aimed at maintaining or increasing the volumes that they acquire in NI.

Their terms and conditions of buying in NI differ from the terms and the prices in the Republic, where suppliers generally have not been receiving as much for their milk.

In most cases, the milk bought in NI is a top-up supply that helps to maximise factory throughput and offset overhead costs. There is also the attraction of a milk pool that provides a good volume of autumn and winter supplies, which is one of the features that can be used to justify that stronger pricing in the North, along with the fact that considerable volumes are collected from relatively few farms.

Some are keener than others to chase after milk in NI. On enquiry this week, Town of Monaghan chief executive Vincent Gilhawley firmly stated that he is not open to resume purchase of milk from any of the producers who quit supplying Monaghan over the past couple of years.

Gilhawley said his priority is to service the 550 producers who have remained with the co-op through the recent period of heavy recruitment by other milk buyers.

As we move towards the end of milk quotas and the possibility that processors will have no shortage of milk going through their factories, the opportunities for milk producers to switch supply to different buyers could be much more limited.

In England, the situation has arisen where some producers have had difficulty finding a milk buyer. Those with relatively small volumes of milk in relatively remote or awkward locations are in the weakest position.

US visit focuses on dairy expansion

Representatives of most of the dairy businesses with a base in Northern Ireland are in the US this week to look at the development of added-value dairy products for export, particularly to Asian markets.

The trip is expected to focus on the rapid expansion of the US dairy industry and the way in which innovation and export marketing is being supported by the US government.

The US dairy industry, which previously concentrated on its home market and sold surpluses as commodity butter or powder, has – in the past – been accused of ‘‘dumping’’ product onto the world market. In 2012, the US increased dairy exports by over 20% to around £5bn, mostly to markets in southeast Asia.

Dr Mike Johnston, chief executive of the Dairy Council for Northern Ireland, said that the aid is transforming the US industry.

“More than 80% of all milk in the US is used for the liquid market. Just 10% is used for cheese and 1% for dry powder products.

‘‘These figures indicate the extent of the challenge that we could all face in the future from the Farm Bill’s strategic focus on increasing added-value in areas such as powder, cheese and butter,” he added.

The 20 delegates from NI will be visiting the Innovation Center for US Dairy in Chicago and the Wisconsin Center for Dairy Research for briefings about new products and future trends in retail in the US and international markets.

The mission, assisted by Invest Northern Ireland, follows a key recommendation in the Agri-Food Strategy Board’s Going for Growth action plan.

Delegation

The delegation includes people from Ballyrashane Co-op, Dale Farm Dairies, Fane Valley Co-op, Lakeland Dairies (Pritchitts), Glanbia Cheese, and Drayne’s Dairy, Lisburn. It also includes representatives from the Dairy Council for NI, the Ulster Farmers Union, Invest NI and the College of Agriculture Food and Rural Enterprise.

They will be attending the World Dairy Expo in Madison and visiting dairy farms and processors in the Wisconsin area.

The Wisconsin Center of Dairy Research, part of the University of Wisconsin, has more than 30 researchers and scientists working on cheese/cheese products and other milk components used as ingredients and as finished products.

Cautious bidding for Holstein heifers

With milk prices falling, buyers were cautious at the first dairy sale of the season at Moira. Auctioneer Michael Taaffe achieved a 75% clearance and an average of 1,700gns a head. The top price went to David Buchanan of Newry who took 2,750gns for his Clongowes Windbrook Beatrice calved heifer, which came from the Clongowes college youngstock dispersal sale last September. Sired by Gillette Windbrook, she has a PLI of £138. Her three-week-old heifer calf by B-Crest Shadow ET was also on offer and sold for 450gns.

The Ards herd of Harry Patton and Sons took the red ribbons in the show with Ards Skipper Trudy, a second calving cow sired by Ards Skipper Red and she made 2,040gns. This price was topped at 2,310gns by their calved cow, Ards Dylan Jessica, who gave 7,475kg in her first lactation and sired by 528 New-World Empire ET.

Tom Morrow