Dairy Processors Raise Milk Prices to Stimulate Production Amid Decline
Source: DairyNews.today
In response to a significant reduction in milk production, dairy processors have taken decisive action by increasing milk prices, aiming to incentivize farmers to boost output as the autumn season approaches. This strategic move comes after a challenging period characterized by unfavorable weather conditions, declining prices, and rising operational costs, all of which have contributed to a concerning drop in milk supply.
The decline in production is particularly alarming for milk processors, who have made substantial investments in expanding their processing capacities in recent years. For the first half of 2024, domestic milk intake was estimated at 4.35 billion litres, a decrease of 242.6 million litres (5.3%) compared to the same period in 2023. The decline is even starker when compared to the first half of 2022, with a drop of 284.8 million litres (6.1%).
Price Increases Across Processors:
Tirlán announced it will pay 44.83 cents per litre (cpl), including VAT, for July creamery milk supplies at 3.6% butterfat and 3.3% protein. This marks an increase of 1.75 cpl from the June payment.
Dairygold raised its July Quoted Milk Price by 2.0c per litre to 44.5c per litre, resulting in an average farm gate milk price of 49.8c per litre based on average milk solids achieved by suppliers in July 2024. The company attributed this increase to improved dairy market returns, particularly driven by rising butter prices. Additionally, Dairygold introduced a feed rebate of €15 per tonne on mainline feed products for four weeks starting from August 12, 2024, to support farmers in increasing their winter fodder stocks.
Kerry Dairy Ireland set its July milk price at 44c per litre, including VAT, translating to a return of 48.32c per litre based on the average milk solids for the month. The processor noted that while global dairy demand remains stable, weak demand from China continues to challenge the market, though rising butter prices have helped bolster returns.
Lakeland Dairies was the first to raise its milk price for July, announcing a base price of 45.25c per litre in the Republic of Ireland, including a 0.5c per litre Sustainability Incentive Payment. This increase represents a 1.75c per litre rise from the previous month.
Industry Reactions:
Commenting on the recent price hikes, IFA National Dairy Chair Stephen Arthur emphasized the necessity of these increases for the survival of dairy farmers, who have faced severe financial strain over the past year. "It’s imperative that milk processors deliver a significant price increase for July supplies. Dairy farmers have endured a horrendous 12 months, which has taken a massive toll on cash flow," Arthur stated. He added that the upcoming months present an opportunity for dairy farmers to stabilize their finances, but this depends on continued support from processors through strong milk prices.
As the dairy industry navigates ongoing challenges, the recent price adjustments by processors are seen as crucial steps to stabilize production levels and support farmers. However, the situation remains dynamic, with processors closely monitoring market conditions and adjusting prices as necessary to ensure the viability of the sector.
Price Increases Across Processors:
Tirlán announced it will pay 44.83 cents per litre (cpl), including VAT, for July creamery milk supplies at 3.6% butterfat and 3.3% protein. This marks an increase of 1.75 cpl from the June payment.
Dairygold raised its July Quoted Milk Price by 2.0c per litre to 44.5c per litre, resulting in an average farm gate milk price of 49.8c per litre based on average milk solids achieved by suppliers in July 2024. The company attributed this increase to improved dairy market returns, particularly driven by rising butter prices. Additionally, Dairygold introduced a feed rebate of €15 per tonne on mainline feed products for four weeks starting from August 12, 2024, to support farmers in increasing their winter fodder stocks.
Kerry Dairy Ireland set its July milk price at 44c per litre, including VAT, translating to a return of 48.32c per litre based on the average milk solids for the month. The processor noted that while global dairy demand remains stable, weak demand from China continues to challenge the market, though rising butter prices have helped bolster returns.
Lakeland Dairies was the first to raise its milk price for July, announcing a base price of 45.25c per litre in the Republic of Ireland, including a 0.5c per litre Sustainability Incentive Payment. This increase represents a 1.75c per litre rise from the previous month.
Industry Reactions:
Commenting on the recent price hikes, IFA National Dairy Chair Stephen Arthur emphasized the necessity of these increases for the survival of dairy farmers, who have faced severe financial strain over the past year. "It’s imperative that milk processors deliver a significant price increase for July supplies. Dairy farmers have endured a horrendous 12 months, which has taken a massive toll on cash flow," Arthur stated. He added that the upcoming months present an opportunity for dairy farmers to stabilize their finances, but this depends on continued support from processors through strong milk prices.
As the dairy industry navigates ongoing challenges, the recent price adjustments by processors are seen as crucial steps to stabilize production levels and support farmers. However, the situation remains dynamic, with processors closely monitoring market conditions and adjusting prices as necessary to ensure the viability of the sector.
23.09.2024
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