A number of milk processors in NI have responded to pressure from suppliers for farmgate prices to reflect strengthening global commodity markets.
Both Dale Farm and Glanbia Cheese have added 1p/l to base prices for milk supplied in January.
This brings Dale Farm to a new base of 27.55p/l, inclusive of the co-op’s 0.3p/l loyalty bonus. In the case of Glanbia Cheese, its base rises to 27p/l before premiums on milk quality are applied.
Elsewhere, Strathroy has also increased its base, adding 0.5p/l, taking it to 27.5p/l. The Omagh processor pays a 1p/l winter bonus for January, so suppliers are on a starting price of 28.5p/l.
That is matched by Glanbia Milk/Fivemiletown, with the Virginia-based company paying suppliers off a base of 27p/l, plus a 1.5p/l winter bonus. However, this price is actually down 0.5p/l from December after Glanbia Milk dropped its co-op bonus for January.
Lakeland Dairies was first to set a January milk price and left its base price unchanged on 26.55p/l. The 3p/l winter bonus no longer applies, although NI’s largest processor will once again pay a 1p/l co-op bonus on all milk delivered last month, meaning suppliers are on a starting price of 27.55p/l.
Aurivo is the only processor that has yet to declare a milk price for January.
Meanwhile, the latest GDT event on Tuesday saw commodity prices increase again with the index price rising 3% to US $3,746/t.
Butter went up 2%, and has increased by more than 50% since last September. Cheddar increased by 2.4%, while skim milk powder and whole milk powder rose by 0.3% and 4.3% respectively.
Demand for dairy proteins is primarily coming from Chinese buyers, although the latest auction also saw improved demand from Africa.
It is the seventh GDT event in a row to record a price increase, and since 15 September 2020, ten out of eleven auctions have been positive.
The GDT index price is currently at its highest level since late spring 2014. In Europe, the Dutch Dairy Board auction on Wednesday recorded the sixth successive increase for butter, which is now priced at €3,600/t. Skim and whole milk powder are also on an upward price curve since the start of the year.
While dairy markets look strong into the spring, input prices on farms are up sharply, so local processors will remain under pressure to maximise returns to farmers.
According to local dairy consultant Jason McMinn, a concentrate price rise of £25 to £30/t since early autumn increases production costs by more than 1p/l on dairy farms feeding 0.4kg of concentrate per litre produced.
“Fertiliser prices have also increased with CAN currently around £240/t, up £60/t on last year, with urea up £80 to £350/t. Milk price needs to rise just to keep in line with inputs,” he added.