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HomeDairySecond processor sets milk price admist ‘weakened’ purchasing power
Catherina Cunnane
Catherina Cunnanehttps://www.thatsfarming.com/
Catherina Cunnane hails from a sixth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the firm during its start-up phase in 2015.
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Second processor sets milk price admist ‘weakened’ purchasing power

Kerry Group has become the second processor to set its milk price for May 2023 supplies, writes farming journalist, Catherina Cunnane.

A statement from the processor to this publication, www.thatsfarming.com, reads that the Kerry Group base price for May milk supplies is 37c/L (Vat Inc) at 3.30% Prot/3.60% Bfat and 40.61 cent per litre (Vat Inc) at EU Standard Constituents 3.40% Prot/4.20% Bfat.

Based on Kerry’s average milk solids for May, the milk price return inclusive of VAT and bonuses is 39.09 cent per litre.

The spokesperson outlined that global dairy markets “continue to struggle with significant demand uncertainty”.

“This uncertainty is largely attributed to a misalignment of income with inflated prices and rising interest rates, resulting in weakened purchasing power.”

“The structural transformation of the dairy industry in China is compounding inflationary based demand uncertainty.”

“The emphasis on domestic milk production and resulting output growth has reduced China’s reliance on global suppliers.

“Global milk production is still positive but is currently experiencing a noticeable deceleration,” the spokesperson added.

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Last month, the processor paid a baes price of 38 cent per litre (Vat Inc) at 3.30% Prot/3.60% Bfat and 41.70 cent per litre (Vat Inc) at EU standard constituents 3.40% Prot/4.20% Bfat.

Based on Kerry’s average milk solids for April, the milk price return inclusive of VAT and bonuses was 40.12 cent per litre.

A spokesperson for the milk processing company, at the time, told this publication:

“Although milk supply in Europe is decreasing and is projected to decline further, there is an increase in milk production from exporting countries in other parts of the world.”

“The demand outlook is varied but currently not robust enough to drive an increase in dairy commodity prices,” the spokesperson added.

Lakeland Dairies

Today’s announcement follows Lakeland Dairies, which confirmed a base price of milk for May at 37.35 cent/litre of VAT, for milk at 3.6% fat and 3.3% protein, on Tuesday, June 13th, 2023.

Meanwhile, in Northern Ireland, Lakeland Dairies will issue a base price of milk for May at 30 p/litre.

The board has confirmed that it has discontinued the monthly Input Support Payment (previously 1.5 cent/litre in ROI and 1.5 p/litre in NI), which was first established in August 2022 onwards.

Read more on this news article.

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