Two dairy co-ops have, today (Monday, February 13th, 2023), confirmed that they have reduced their milk prices for January 2023 supplies.
On foot of the announcements, processors have reported that markets “started turning” towards the end of 2022 and have weakened “very significantly” in recent months, with growth in global milk supplies continuing.
As is commonly the case, Lakeland Dairies was the first in line to make its announcement earlier this afternoon (Monday), a move which was followed by Kerry Group.
The board of Lakeland Dairies stated that it decided to reduce the co-operative’s milk price for January, following consideration of “all current market conditions”.
In the Republic of Ireland, it has reduced the milk price by 6 cent/litre to 52.85 cent/litre inclusive of VAT, for milk at 3.6% fat and 3.3% protein.
The January price includes an Input Support Payment of 1.5 cent/litre, inclusive of VAT, for all suppliers.
Meanwhile, in Northern Ireland, Lakeland Dairies has reduced the milk price by 5p/litre to 42.5 p/litre. The January price includes a supplementary Input Support Payment of 1.5 p/litre.
A spokesperson for the processor reported that high rates of inflation are impacting overall market sentiment.
“Demand has reduced, buyers have held back, exports have slowed, and prices have eased considerably,” the spokesperson added.
“This will have a continuing impact for all processors during 2023 and will continue to affect milk price, in line with weaker market conditions, over the coming months.”
“Lakeland Dairies is acutely aware that any pricing adjustments create challenges for dairy farmers, as input costs remain high.”
“The co-operative will seek at all times to maximise returns for milk suppliers.”
“While the overall balance of supply and demand is challenged by increasing supplies, softer demand and reduced returns, Lakeland will pay as competitive a milk price as possible, in line with market conditions,” the spokesperson added.
Meanwhile, a spokesperson for Kerry Group has confirmed to this publication that it is also reducing its base price.
It paid a base price of 56 cent per litre (Vat Inc) at 3.30% Prot/3.60% Bfat and 61.28 cent per litre (Vat Inc) at EU Standard Constituents 3.40% Prot/4.20% Bfat for December 2022 supplies.
Based on Kerry’s average milk solids for December, the milk price return, inclusive of VAT and bonuses, stood at 71.35 cent per litre, according to the processor.
It also paid an additional 1 cent per litre (Vat Inc) @ 3.30% Protein and 3.60% Butterfat on December volumes as part of its contractual commitment.
In a statement today, Kerry Group confirmed that its base price for January milk supplies is 50 cent per litre (Vat Inc) at 3.30% Prot/3.60% Bfat and 54.76 cent per litre (Vat Inc) at EU Standard Constituents 3.40% Prot/4.20% Bfat.
Based on Kerry’s average milk solids for January, the milk price return inclusive of VAT and bonuses is 58.84 cent per litre, it reports.