Downward pressure in global dairy commodities continues to filter through, with NI processors cutting prices for August supplies.

Lakeland was first out last Wednesday with a 1p/l reduction, taking its base to 38.3p/l, which is the lowest base price offered by the processor for a year.

It is a similar picture elsewhere, with Strathroy down 1p to a base of 38p/l and Leprino Foods down 1p/l to a base of 37.25p/l.

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Dale Farm took its base price down 1.5p/l to 38.8p/l to include its 0.3p loyalty bonus and before transport charges are applied.

However, some of that reduction will be negated by payments to suppliers under the Dale Farm Milk Production Realignment (MPR) scheme. That scheme, now in its second year, pays members 4p/l for additional litres supplied between August and January. The reference volume is based on the three-year average over the same months between 2021 and 2023.

When the first MPR payment was made last August, it was worth an average of 0.37p/l across the Dale Farm supply base.

However, NI milk production is up over 8% so far in 2025 and that is reflected in the MPR figure, which paid out an average of 0.61p/l to Dale Farm suppliers in August 2025.

Commodities

Last August, all prices were heading upwards and in the case of Dale Farm, it increased its base price by 3p/l. That reflected the direction of travel for commodities, with butter at the Dutch Dairy Board auction hitting a record high of €8,100/t in September 2024, with whole milk powder at €4,410/t and skim milk powder at €2,580/t.

Since then, those powder prices have eased back to €3,820 and €2,250/t respectively. However, butter has come under significant pressure.

By mid-August 2025, it had dropped back to €7,000/t. However, the last few auctions are of real concern, with a €1,220/t cut in the last three weeks leaving price at €5,600/t. It is the lowest price for European butter since early spring 2024.

With prices going down, sources in the trade maintain that commodity buyers have stepped back, so the price situation remains uncertain over the next few months.

GDT

Meanwhile, prices at Tuesday’s Global Dairy Trade (GDT) auction fell by 0.8% to an average price of US$4,041/t. It is the third price drop in a row, although less severe than the 4.3% cut earlier this month.