All processors have cut their milk price for July supplies, citing weak butter markets for the cuts.

Dairygold, Carbery, Glanbia and Kerry all cut by 1c/l over the last week.

For July milk, Dairygold will pay suppliers a base price of 28.16c/l, Carbery will pay 29.8c/l, Glanbia will pay 27.9c/l and Kerry will pay 27.9c/l.

Aurivo and Lakeland cut their milk prices by 0.5c/l. Aurivo will pay suppliers 28.47c/l and Lakeland will pay a base price of 29.2c/l. All prices are excluding VAT.

Poor butter markets have been blamed on the price cuts, with a spokesperson for Aurivo saying: “Butter returns have deteriorated significantly in the last number of weeks. Powder markets remain solid. The board will keep the evolving situation under review in the coming months and pay the maximum price that markets can return.”

The weakness in butter prices has been caused by excess supply over demand, according to a Dairygold spokesperson.

“More recently, cheddar cheese returns have been negatively impacted, primarily due to the uncertainty over Brexit. Regrettably, a downward milk price adjustment is necessary.”

Auction

The price cuts coincided with a marginal drop in dairy prices at this week’s Global Dairy Trade auction, with prices down 0.2%.

IFA dairy chair Tom Phelan said farmers felt let down that their co-ops’ Brexit preparation strategy seemed to rely heavily on cutting and further talking down milk prices, using farmers’ hard work in terms of increased butterfat and protein content and extra volumes to soften the blow.

Ger Quain, chair of ICMSA’s dairy committee, said that the milk suppliers were questioning how they have got to a situation where so far this year there is a difference of €8,000 between the highest-paying co-ops and the lowest-paying.

“People will talk about present market uncertainty and variables, but the market uncertainty and variables are the same for all our co-ops. A difference of 3c/l between top and bottom for July? We don’t buy it,” he said.

This article has been updated to correct the Aurivo base milk price for July, which is 28.47c/l, excluding VAT.

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