Lakeland Dairies has cut its milk price for July, announcing a base price of 33.81c/l, excluding VAT, a drop of 1.85c/l on its June price.

“Global demand for dairy products remains sluggish. This weak demand is being met by resilient milk supplies in many of the larger production areas, resulting in a continued imbalance between supply and demand,” a spokesperson said.

The Lakeland’s price cut comes as Tuesday’s Global Dairy Trade (GDT) auction saw its overall index drop by 7.4% to 850 points, putting the cumulative drop at 15% since the middle of June. The current GDT is at its lowest level since November 2018.

The whole milk powder (WMP) market is bearing the brunt of the price drop, with prices down 11% at Tuesday’s event, following on from a 10% drop a fortnight ago. The WMP price stood at €2,331/t, down just over €500/t since 18 July.

The results come as China’s economy remains in the doldrums, curtailing demand. The major market’s internal milk production has also increased considerably, reducing its import demand. Globally, dairy production is not slowing as much as had been predicted earlier in the year.

Ornua

The Ornua Purchase Price Index (PPI) for July is also down. The Index stands at 121.3, which is down from 124.0 in June.

This is equivalent to a milk price for July of 36c/l, excluding VAT, and including the Ornua value payment. This is down 0.85c/l on the equivalent milk price for last month.

Meanwhile, Kerry Group has offered suppliers a fixed milk price for March to October 2024 of 31.78c/l, excluding VAT, with farmers already criticising such a poor milk price projection into next year.

Kerry Group gives milk suppliers 3c/l top-up

On Wednesday, Kerry Group confirmed that its leading price commitment will see its milk price stay steady for July at 35c/l, excluding VAT, and base solids of 3.3% protein and 3.6% butterfat.

The processor announced its base price for July milk supplies, at 32.4c/l, excluding VAT, down almost 3c/l on its June price.

However, a leading milk price top-up has been doled out by Kerry Group, at 3c/l to suppliers on all qualifying milk volumes in the month of July.

It will see farmers receive 35.4c/l, excluding VAT, in their July milk cheque.

‘Downward pressure’

A Kerry Group spokesperson said the outlook on commodity dairy continues to be “bearish with further downward pressure on European and global pricing”.

“Dairy demand continues to struggle with no sign currently of any near-term correction.

“On the supply side, milk production across the major exporters continues in weak positive territory with volumes more than enough to meet subdued demand,” they said.