Milk price records tumble in US, Irish market steadier

Milk price records tumble in US, Irish market steadier
Milk price records tumble in US, Irish market steadier
A 73% monthly milk price has set a new record in the US. The market is steadier in Ireland and the EU, but resilient despite Covid-19.

More of the big co-ops increased prices for June milk over the past week, including Carbery and Dairygold.

Carbery said if their increase of 0.5cpl is replicated across the Bandon, Barryroe, Drinagh and Lisavaird Co-ops, this will result in an average price for June of 31.9cpl, including VAT.

This price includes a 1cpl increase in the base price and a reduction of 0.5cpl in support being paid from the stability fund (1cpl in support continues to be paid from the stability fund), giving a net increase of 0.5cpl.

The price is exclusive of SCC or any other adjustments made by co-ops.

Dairygold added 1cpl for its June base price of 30.19cpl, including bonuses and VAT.

A spokesperson said there was more positive market sentiment in recent weeks, but global uncertainty and volatility prevailed.

The resilience of global dairy markets despite the Covid-19 pandemic has been reflected in figures such as a 20.7% increase in butter consumption by households during France’s 15-week lockdown, along with consumption rises of 18% for cheese, and 10.7% for milk.

Similarly, German butter consumption rose by 15%.

Other markets were not so resilient. Despite government purchasing programmes driving dairy consumption in the US, fluctuations in their milk prices set new records in June.

The 73% rise in Class III milk prices was the highest ever in one month, from $12.14 to $21.04 per cwt (45.36 kg), or from €27.46 to €46 per 100 kg of standard milk.

After a sharp increase in 2019, Class III milk prices (mainly based on the selling prices of cheese) plummeted in early 2020. 

Due to the corona crisis and the closure of schools, universities, restaurants, food services, etc, sales of dairy products in the US fell sharply, while milk production increased.

This led to a low point in milk prices and dumping of raw milk. In May, partly due to relaxation of corona crisis rules, demand picked up, and milk production had decreased.

These trends led to a cheese shortage, resulting in a huge cheese price rise in June.

Other disruptive events in the global dairy market include the 6% rise in Australian milk production for May, compared to last year.

And it has been confirmed that Irish dairy processors had considerable difficulties in getting hold of refrigerated containers for exporting dairy produce.

The cost of these containers increased by more than 200% in April and May.

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