The latest DAERA statistics show that NI milk production totalled 2.34bn litres in 2018, up 60m litres on the 2.28bn from 2017.

The 2018 figure is the highest production ever recorded in NI. In the last decade, annual NI milk output has risen by 440m litres.

Milk price

While milk output increased in 2018, the farmgate milk price was down slightly, averaging 28.68p/l across the year, compared with 28.73p/l in 2017.

However, the 2018 figure was significantly higher than in 2016 when markets were in a slump and farmgate prices averaged 20.24p/l.

For a 1m-litre producer, this price difference is worth an extra £84,400 in annual milk sales.

The highest milk price recorded in recent years came in 2013, when prices averaged 31.34p/l.

Britain

Looking at prices in Britain, the 2018 average there was 29.45p/l, which is 0.77p/l ahead of NI.

However, that gap is narrower than in recent years.

Over the last five years, milk prices in Britain have averaged 27.67p/l, compared with 25.63p/l in NI.

EU intervention

Meanwhile, just 504t of skim milk powder (SMP) were sold out of EU intervention stores last week, despite bids for 2,172t and expectations that all stocks would be cleared.

However, of all bids received, just 27% met the minimum price of €1,662/t, which is the highest intervention price since June 2017 and reflects the rising demand for SMP.

After last week’s auction, just over 3,000 of SMP remains in EU intervention stores, with the vast majority of product held in Spain. The UK has 389t of powder still in store.

Expectations are that the remaining stocks will be sold at the next tender on 19 February.

Commodity prices

With intervention stocks nearly gone, commodity auctions have started 2019 strongly, with the latest GDT index price reaching its highest level for eight months at US $3,265/t.

This converts to a milk price of approximately 32p/l, before applying any costs for processing, etc – normally estimated at 4p-5p/l.

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