Only Kerry Group has held its price for August milk, with most of the big buyers cutting 1 cent per litre (cpl), compared to July. Suppliers to the top-paying West Cork co-ops will be affected by a Carbery price cut of 1cpl.
However, changing milk composition will soften the price cut for some suppliers. Although Glanbia has dropped its base milk price by 1cpl, the actual average price paid, of 32.94c, compares to 32.97c in July, and 33.5c in June.
Glanbia Chairman Martin Keane said: “Glanbia Ireland’s milk price for August has been adjusted to reflect weaker market returns for some products, including butter. The rate of growth in global milk production is restrained, but unfortunately the supply-demand balance for certain products is weaker.”
Dairygold Co-op has cut its base milk price for August supplies by 1cpl.
A spokesperson said markets continue to be “challenging”, with recent butter returns the significant factor.
Lakeland Dairies has cut its base price 0.75c for August milk. The co-op said:
The Ornua Purchase Price Index has fallen to 103.5 for August, from 104 in July. This monthly indicator of market returns for products purchased from co-ops by Ornua has fallen from 107.3 in May.
Irish milk production increased 7.5% in the first half of 2019, in stark contrast to an overall EU increase of only 0.2%. This low supply trend has helped to support EU prices in general, with the recent 45.5 c/kg spot milk price in Italy near an all-time record for September.
Despite a recent excellent export performance for EU dairy products (especially for butter), EU butter prices fell 4.7% in four weeks. Whey, cheese, and whole milk powder prices have also fallen in the EU. So far this year, EU butter prices fell 17.5%, but skim prices improved 20.3%, to their highest level in more than 30 months.
The weighted EU average farm gate milk price remained 3.7% higher year-on-year in June, despite having fallen 1% from May.
Ireland, France, and Denmark have been the EU’s top three butter exporters this year. Despite butter imports increasing 44% in the US, the EU’s market share there has fallen 7%.
The Chairperson of ICMSA’s Dairy Committee, Ger Quain, said dairy farmers are furious about the August milk price cuts. IFA National Dairy Committee Chairman Tom Phelan said Irish milk prices seem to have fallen more than most. He said the gap between EU prices and Irish prices increased from €1.30 per 100 kgs in July 2018 to €3.60 in July 2019.