A 3p/l price gap has opened between the highest and lowest base milk prices in NI, making it the largest price differential between processors in 11 years.
With all processors having declared prices for August supplies, Dale Farm leads the pack on a base of 30.55p/l, despite applying a 0.5p/l price cut.
Included within this price is the co-op’s 0.3p/l loyalty bonus – however, the price does not include deductions for milk collection, with Dale Farm being the only processor to apply charges as standard. Typically these amount to around 0.35p/l for a 1m-litre producer.
At the opposite end, on a 27p/l base, are Tirlán and Leprino Foods (formerly Glanbia Cheese). Tirlán reduced its base by 2p/l, with Leprino Foods making a 1p/l reduction.
While both do pay sustainability premiums for meeting certain criteria, ultimately, the gap from top to bottom base price is approximately 3.2p/l – the largest differential between NI processors going back to July 2012. Applying that 3.2p/l price gap to a 1m-litre producer supplying 7.7% of their annual production during August, amounts to a difference of just over £2,400 in monthly milk sales.
Elsewhere, Strathroy Dairy made a 1p/l price cut, putting its suppliers on a base of 30p/l. Aurivo opted for a 1.25p/l cut, bringing its base to 29p/l. Last week, Lakeland Dairies made a 1.25p/l correction to a base of 27.25p/l.
Across all processors, August base prices average 28.47p/l, making it the lowest monthly average since January 2021.
Farmgate milk prices in NI are significantly lower than those paid in Britain during 2023, official price reports compiled by the Agriculture and Horticulture Board (AHDB) show.
The NI price for June was 4.6p/l below the equivalent price in Britain, with a 4.92p/l gap in May and a 6.6p/l differential in April.
However, almost 50% of milk in Britain is sold into liquid markets, whereas in NI that figure is just over 10%, with the bulk of milk destined for commodity markets – which tend to react quicker to global price trends.
Dairy markets received a welcome boost on Tuesday, following a 4.6% increase at the GDT auction, with butter, skim and whole milk powder recording significant gains.
It is the second successive positive auction, coming after the dramatic 7.4% drop in mid-August. However, analysts maintain it is too early to say that the global market has turned – further price rises would be required in October and November to instil more confidence.