Irish milk prices are likely to hold at current levels, despite the recent sharp fall in prices at the Global Dairy Trade.

Last week’s auction saw the price index drop by 6.9% on the back of larger than usual volumes of product on offer and a major correction in the price of skim milk powder.

However, Irish dairy processors insisted that a similar fall in local milk prices was extremely unlikely given the current supply situation.

Irish industry sources forecast that base farm-gate milk prices are likely to hold at the current levels of 42-43c/l (VAT inclusive) into the back end of the year.

Drop in milk intakes

Supply figures from the Central Statistics Office (CSO) show that for the period January to May 2024, domestic milk intake dropped by 211m litres or 6% when compared to 2023.

Milk intakes for the five-month period were back 241m litres or 6.7% when compared with January to May 2022.

Staying with milk prices, ICMSA president Denis Drennan has warned of a “slow-motion” collapse of the dairy industry due to increased costs eroding margins. Drennan maintained that the cost of production is now 37c/l, which leaves a margin of just 5-6c/l at current farm-gate prices.

The ICMSA leader calculated that this margin will give the average dairy farmer with 92 cows and a total production of 550,000 litres an income of €33,000 off milk and €18,000 after loan repayments are deducted. Given that dairy farmers work around 60 hours per week, this income level equates to €5.76/hr, Drennan estimated. He described this pay rate as an “absolute disgrace”.