Although some milk processors are yet to declare a price for milk supplied in January, Dale Farm has set the early pace with an increase of 1.5p/litre on base price.

When combined with its loyalty bonus of 0.3p/l, Dale Farm’s January base comes to 25.8p/l before adjustments. Just 12 months ago, Dale Farm paid a base price of 18.2p/l on January milk, which is a strong reflection on just how far milk markets have improved in the last year.

The 1.5p/l rise in January will soften the loss of the 2p/l winter bonus paid on milk supplies in December.

Milk production levels are on the increase across NI and Dale Farm reports that it is processing higher volumes of milk compared with 12 months ago.

First

Lakeland Dairies was the first co-op to declare its January price on Monday of this week, increasing its base price by 0.5p/l to 25p/l.

As Lakeland’s 3p/l winter bonus has now ended, producers will be down 2.5p/l for January milk.

Glanbia Milk and Fivemiletown also declared their January price on Monday, with no change from December.

This leaves them on an “all-in” price of 25.5p/l, which includes their year round 0.6p/l bonus payment.

Strathroy is also unchanged on a base of 24p/l. But with an extra 1p/l payable through its winter bonus structure, it leaves its producers on 25p/l. Red Tractor suppliers can avail of an additional 0.2p/l.

Glanbia Cheese is due to decide on its January price this Thursday, with Aurivo meeting on Friday of this week. LacPatrick is the other major co-op yet to show its hand.

In December, Glanbia Cheese paid a base of 23.25p/l plus a 2p/l winter bonus, taking its total price to 25.25p/l before volume and quality adjustments.

Aurivo and LacPatrick both paid a December base of 24.5p/l, with Aurivo offering an additional 1p/l winter bonus, which is no longer available.

Costs

Despite the welcome recent increase in milk prices, input prices are also on the rise, and as pointed out by Charlie Weir, the chair of Fair Price Farming in NI, rolling 12-month average prices, at slightly over 20p/l, are still well below costs of production. “Everyone needs to take a longer-term approach. We are hearing reports of farmers that were on interest only, being moved back to capital repayments. Unless the term length of the loan is extended, the increase in monthly payments is significant – thousands in some cases,” he told the Irish Farmers Journal. According to Weir, some farmers are now trying to produce more milk to meet these payments, which could be counter-productive. “More milk leads to more volatility. We all need to be careful that we don’t end up driving prices down by oversupply,” he said.

Along with Holstein NI, Fair Price Farming has floated the idea that the European Commission should consider setting up a scheme to take 0.1c/l off all milk to create a €150m/year fund to help manage price volatility. When the market shows signs of over-supply, producers would then have the option of entering into a voluntary milk reduction scheme.