Dairygold latest co-op to drop milk price

Dairygold yesterday followed the example of other milk processors and reduced the price it will pay suppliers for June milk.

It decided at a board meeting to set a price of 27c per litre, including Vat, a reduction of 1c a litre on the previous month.

It said international dairy markets remain turbulent and the latest Global Dairy Trade auction (GDT) this week fell a massive 10.7%.

“This is GDT’s ninth consecutive fall this year and demonstrates that dairy markets are still on the downside of the price cycle. The expected rebalancing of supply and demand is taking longer than markets initially anticipated,” it said.

The co-op said China’s absence from dairy markets and the ongoing Russian ban are, together, having a negative impact on demand.

“Ongoing adjustments are needed to reflect falling market returns,” it said.

Aurivo Co-op, which operates in the North-West, also cut its base milk price for June, yesterday, by 2c/l to 26c/l including Vat. But it also decided to draw from its stability fund to offset the cut.

As a result, the price paid to farmers will remain unchanged at 28c/l. Three other leading processors — Lakeland Dairies, Kerry and Glanbia — have all set a 28c/l price for June milk with Arrabawn at 27.87c/l.

Glanbia Ingredients Ireland (GIL) cut its price for market milk by 1.5c/l to 26c/l but the price the group wlll pay suppliers will be 28c/l as a result of 1c/l coming from a stability fund and a 1c/l support payment from its co-op.

Meanwhile, the European Commission’s short-term outlook for the dairy sector said deliveries are expected to be up by just 1% in 2015.