A decision by Tirlán to hold its milk price through to March has potentially limited the scope for other processors in NI to apply further cuts to the prices paid for milk this winter.

Announcing its December milk price on Tuesday, Tirlán confirmed it would remain unchanged unless in the event of some unforeseen events, with the co-op keen to support winter milk suppliers.

In NI it means a base price of 29.9p/l to include a 0.4p sustainability payment. There is also a 3p/l winter bonus to be added in, which takes the starting point to 32.9p/l. That starting price will be unchanged from November through to February.

ADVERTISEMENT

Low volumes

To be fair to other NI processors, Tirlán has relatively low volumes through the winter period when compared to its overall milk pool, so it is in a position to support prices over the period.

However, with other processors taking 1.75p to 2.5p off base prices for December milk, it has left Tirlán paying well ahead of its rivals.

Last week, Lakeland took 2.5p off its December base, leaving it at 26.3p, before a 3p winter bonus is added in.

Leprino Foods applied the same 2.5p cut, taking its base to 25.5pl, before the same 3p winter bonus is included.

Both Strathroy and Dale Farm applied 2p/l reductions in December. That leaves the Strathroy base at 27.5p before adding in a 3p winter payment. Dale Farm is at 28.3p, before a 1p winter support payment and 2p bonus are included.

Aurivo took 1.75p/l off its base price, taking it to 27.75p/l. The co-op also pays a 3p winter bonus on December milk.

There will be a full analysis of December milk prices in our Milk League in next week’s edition.

Sources in the trade maintain processors are continuing to pay prices ahead of returns, with strong global supplies negatively impacting the market.

Commodities

However, there have been some signs in recent weeks that commodity markets have bottomed out, although at prices which are among the lowest in over five years.

At the Dutch Dairy Board auction on Wednesday, after four weeks of stable prices, butter was down €150/t at €3,950/t. Whole milk powder was back €30 at €3,000/t, although skim milk powder was up €40 at €2,140/t.

The New Zealand Global Dairy Trade (GDT) auction on Tuesday saw the index move up 1.5%, which follows on from a 6.3% increase from two weeks ago. These prices are mainly for product traded in the second quarter of the year.

Former suppliers take legal case against Lakeland

A legal case taken by a group of former NI suppliers to Lakeland Dairies has been listed for hearing in a County Court in March.

It is understood the case involves over a dozen former suppliers who had loyalty payments withheld by the co-op when they put in notices to move to a different processor. The amounts involved run into six figures at the very top end.