Dairygold Increases Milk Price Amid Global Market Challenges

Dairygold has announced an increase in its May quoted milk price, raising it by 0.5c/L to 37.5c/L. This price is based on standard constituents of 3.3% protein and 3.6% butterfat and includes sustainability and quality payments along with VAT. According to the cooperative, this adjustment results in an average farm gate milk price of 41.9c/L for the month, reflecting the average milk solids achieved by its suppliers.

For EU standard constituents of 3.4% protein and 4.2% butterfat, the quoted price is 41.2c/L, inclusive of VAT. Pat Clancy, the chair of the Dairygold board, noted that global dairy markets remain challenging. He stated that an elevated milk supply continues to weigh on returns, particularly across butter and cheese markets. Clancy emphasized that Dairygold is committed to maximizing returns for its members and will continue to monitor market conditions closely.

The challenges facing the global dairy sector were highlighted in the latest Global Dairy Trade (GDT) event held on June 16, where prices fell in most categories. The GDT Index decreased by 2.8%, with an average price recorded at €3,428 per ton. This marked the second consecutive decline, reversing a recent upward trend. During the event, 12,922 tons of product were sold, with 151 bidders participating.

According to Rabobank's latest Global Dairy Quarterly Q2 report, global milk production growth has started to slow down in the second quarter following four consecutive quarters of expansion. The report also pointed out that rising input costs, including energy, fertilizer, and interest rates, are significant concerns for the industry, potentially impacting margins in the latter half of the year.