Lakeland Dairies has set its December 2021 milk price, becoming the first processor to do so.
Earlier today (Thursday, January 13th), the board of Lakeland Dairies announced that it has decided the co-operative’s milk price for December.
In a statement, a spokesperson for the milk processor said:
“In the Republic of Ireland, Lakeland Dairies has increased its milk price by 0.5 cent/litre to pay 40 cent/litre inclusive of lactose bonus and VAT, for milk at 3.6% fat and 3.3% protein.”
“Meanwhile, in Northern Ireland, Lakeland Dairies has increased its milk price by 0.4 p/litre to 31.9p/litre.”
Lakeland December 2021 milk price
The spokesperson said global dairy markets are “relatively strong” with a “general” balance in supply and demand worldwide and “strong” demand in Asia.
“The recent global surge in the new variant of Covid-19 has had a moderating effect on economic activity across every continent including disruption and restrictions which have affected normal global trading patterns and market trends over several weeks.”
Lakeland Dairies confirmed that it would continue to monitor the market.
Processors must pay a milk price ‘well in excess’ of 40c/L
Last week, the IFA stated that it believes milk processors must increase their milk prices for December 2021 supplies.
Its dairy chairman, Stephen Arthur, stated that processors must pay a milk price “well in excess” of 40c/L this month.
The Ornua PPI for December has climbed to 135.5, an equivalent farm gate price of 41.6cpl (VAT incl).
When adjusted to include the Ornua Value Payment, worth €3.72m, the equivalent farm gate price is 45.6cpl.
Arthur pointed to rising input costs, adverse weather, and more “restrictive” environmental policies.
As a result, he said global milk supply from the main exporting countries has been constrained despite a “substantial” increase in dairy commodity prices.
He added that this tightened supply supports the “sustained” rise in milk price we have seen for the past six months.
This week’s New Zealand GDT auctions also reported milk price increases in butter, SMP and cheddar cheese.