Arrabawn could set trend for dairy co-ops by cutting its milk price

Dairy co-ops could follow Arrabawn’s lead and cut their milk price in the near future, according to analysts at Bloxham Stockbrokers.

Arrabawn is expected to cut its milk price by 1.95c per litre, making its March price 32.5cpl including VAT — effectively bringing it back to the 32.34cpl it offered in January. The Tipperary co-op is expected to make this move after its annual meeting today in Nenagh, at which it will issue its financial results for 2011.

With prices being paid for milk reducing internationally due to a stronger than expected global output for spring, Bloxham Stockbrokers predict that other Irish co-ops will follow Arrabawn’s lead and shortly cut their price per litre.

In its market analysis issued yesterday, Bloxhams stated: “One of the significant Irish co-ops — Arrabawn — is cutting its farmer milk price by 1.95c to 32.5c for March in response to slower dairy markets. The move contrasts with other processors including Glanbia that are holding the price at 34c. Any further weakness in dairy markets will trigger an industry-wide reduction in raw milk prices for the seasonal spring and summer peak.”

The IFA, ICMSA and other farmer organisations have called upon the other Irish dairy co-ops to retain their milk prices at current levels.

Lakeland is offering 34.5cpl for March, while a price of 34cpl is currently available from Glanbia, Dairygold, Kerry, Monaghan and Wexford Creameries.