Milk prices continue to rise in NI with processors adding 1.5p/l to 2p/l to February base prices, making it the seventh month in a row for an across-the-board price rise.

Outside of winter bonus payments, the last time processors raised base prices by a similar amount was August 2017.

With dairy commodity markets booming, the latest price increases bring the average base price to 35.5p/l.

Lakeland Dairies set the trend on Friday with a 2p/l rise, putting suppliers on a base of 34.7p/l. Once all adjustments are made for quality and volume, the co-op has said that it will pay out an average of over 36.75p/l for February milk.

A 2p/l increase was also applied by Strathroy, and along with a 1p/l winter bonus for February, its suppliers are on an all-in base of 35.5p/l.

Glanbia Cheese also announced a 2p/l increase which brings its base to 34.5p/l.

However, Dale Farm settled on a 1.5p/l increase, putting its suppliers on 35.55p/l with its 0.3p/l loyalty bonus included. Glanbia Ireland/Fivemiletown also opted for a 1.5p/l increase, but it pays a 1.5p/l winter bonus for February and along with its 0.4p/l sustainability bonus, Glanbia’s suppliers are on a starting price of 36.65p/l.

Aurivo is the only processor still to set a February price.

MPI

With the latest UFU milk price indicator (MPI) around the 45p/l mark, sources in the trade have suggested that it is creating unrealistic expectations around future milk prices.

The MPI is a forward indicator of price (six to eight weeks), and does not account for a processor margin or transport costs. It also allows 3p/l for processing costs, a figure initially set in 2014.

Given the surge in energy costs in recent months, co-ops maintain that processing and transport costs are now more typically 6p/l to 8p/l. However, there is no dispute that the MPI does give an accurate picture for trends in the market.

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