A number of processors have set their March 2023 milk prices, with declines of up to 4c/L reported on the previous month’s rates, writes farming journalist, Catherina Cunnane.
Lakeland Dairies and Kerry Group have led the charge by becoming the first two processors to make milk price announcements this month.
In a statement to That’s Farming, a spokesperson for Lakeland Dairies pointed to volatile economic conditions, diminished consumer confidence and reductions in demand from dairy buyers, which are “yielding consistently lower market returns”.
They reported that global dairy supplies continue to run ahead of these reduced demand levels, which has “necessitated an ongoing correction” in milk prices pending any return to more balanced supply and demand conditions.
In saying so, the board of Lakeland Dairies has reduced the co-operative’s milk price for March as global dairy market conditions “continue to disimprove”.
In the Republic of Ireland, it has slashed its milk price by 4 cent/litre to 42.85 cent/litre inclusive of VAT, for milk at 3.6% fat and 3.3% protein.
The March 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 3.5p/litre to 35 p/litre. The March price includes a supplementary Input Support Payment of 1.5 p/litre.
Lakeland Dairies stated that it is seeking to implement any such adjustments arising from this market correction as sustainably as possible in the full understanding that milk producers are operating in a high-cost environment.
“The co-operative’s intention remains at all times to pay as high a milk price as possible in line with currently unpredictable market conditions,” the spokesperson added.
Meanwhile, in a statement to this publication, a spokesperson for Kerry Group also echoed similar market sediment commentary.
The current state of play in dairy markets, has resulted in commodity prices experiencing a “significant” decline, reaching levels that “cannot sustain current milk prices”, the spokesperson explained.
Furthermore, the elevated costs of both farm and factory operations are exacerbating the challenging outlook for profitability among all stakeholders in the dairy industry, the statement added.
Kerry Group’s base price for March milk supplies is 40 cent per litre (Vat Inc) at 3.30% prot/3.60% bfat and 43.88 cent per litre (Vat Inc) at EU standard constituents 3.40% Prot/4.20% Bfat.
Based on Kerry’s average milk solids for March, the milk price return inclusive of VAT and bonuses is 43.66 cent per litre.
Kerry Group will also pay an additional 2c/L (VAT inc) @ 3.30% protein and 3.60% butterfat on January, February and March volumes as part of our contractual commitment.
Last month, the processor announced that its base price for February milk supplies was 44 cent per litre (Vat Inc) at 3.30% Prot/3.60% Bfat and 48.23cent per litre (Vat Inc) at EU standard constituents 3.40% Prot/4.20% Bfat.”
The announcements come just days after ICMSA publicly declared its call for a hold on milk price to halt a “disastrous crossover” into costs exceeding price.