Dairy processors have taken a cautious approach to prices for October supplies as winter bonus payments come into effect.

While base price prices are unchanged, winter bonus payments effectively result in a net increase of 1-2p/l, depending on the processor. Of those which have now declared a price for October, Dale Farm is out in front on 49.05p/l.

This breaks down to a base of 47.05p/l, including its 0.3p/l loyalty bonus as well as the co-op’s 2p/l winter milk premium payable in October, November and December.

Glanbia Cheese is next up with a starting price of 48p/l. This includes a 2p/l winter bonus, again payable for the final three months of the year.

Strathroy will pay its suppliers a starting price of 47.5p/l, which consists of a 46.5p/l base and 1p/l winter bonus payable over the five months from October to February.

It is a price matched by Lakeland Dairies, although NI’s largest processor does not pay a winter bonus on October milk, instead opting for a 3p/l premium in November and December.

That leaves Tirlán and Aurivo still to declare a milk price for October. In the case of Aurivo, it is understood that the co-op is considering changes to its pricing mechanism for NI milk, following on from the trend set by Dale Farm, Lakeland and Tirlán in recent months.

Market pressure

On Tuesday, the second and final GDT auction for November ended with a 2.4% increase in the index price, halting a run of three negative auctions.

Dairy commodity markets have come under pressure this autumn, with eight of the last 11 GDT auctions recording lower prices.

European markets have also seen prices for butter, cream and powders trending downwards. While commodity prices are still above 2021 levels, the indication from processors is that current base prices cannot be sustained in early 2023.

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