Late supply bonus adds 2c at Glanbia

Stable dairy markets as Bord Bia predicts Irish dairy supply  and export increases
Late supply bonus adds 2c at Glanbia

Glanbia Ireland Chairman John Murphy: dairy markets are generally stable and the new EU-UK Trade & Co-operation Agreement is a positive development.

Glanbia advanced their price 2c for December creamery milk, paying a base price of 33.5 cent per litre (cpl), including VAT.

It includes a late supply bonus of 2 cpl paid on all high-quality milk in December, plus the 0.42 cpl ‘Share of GI Profit’, and a 0.4 cpl support payment, both from Glanbia Co-op.

The actual average price paid by Glanbia for December creamery milk will be about 41 cpl.

Liquid milk contract holders and autumn calving scheme participants receive specific bonus payments, while the late supply bonus is confined to creamery suppliers.

Glanbia Ireland Chairman John Murphy said: “Overall, dairy markets are generally stable and the new EU-UK Trade & Co-operation Agreement is a positive development.”

Lakeland Dairies has announced a 32.28 cpl base price (including VAT/lactose) price for December.

A spokesperson said global dairy markets are steady, with supply and demand largely in balance, but concern at the pace of milk growth in many of the main supply regions, which could significantly impact market prices.

Lakeland said buyers will remain cautious for the early months of 2021.

The co-op strongly welcomed the EU-UK Free Trade Agreement signed on Christmas Eve. “A no-deal scenario would have created a hugely difficult situation. There are some transport, trade and administrative disruptions as a result, and the long term impact from the UK’s exit from the EU will only be seen in the weeks, months and years ahead. However, we are dealing with all such matters appropriately and efficiently.”

IFA Dairy Chairman Tom Phelan said a price of 32.86c is justified by the Ornua Purchase Price Index and Value Payment, and almost all major milk processors fell short of this target last month.

Across the EU, milk prices are not expected to change much in December, according to the monthly milk price report by ZuivelNL on behalf of Dutch farmers, in collaboration with the European Dairy Farmers.

In January, Belgian dairy farmers who supply to Milcobel will see a milk price of €1.40 per 100 kg, but Arla and FrieslandCampina will lower prices by €1.20 and €0.90, respectively.

Bord Bia said today the Irish milk supply will grow 3-4% this year, and exports should increase.

The food board said the industry is well-positioned, but must be able to address questions asked on sustainability and animal welfare.

Farm gate milk prices were resilient in 2020, but market threats remain in 2021, according to Bord Bia.

Rabobank predicts supply growth across major exporting regions of 1% in the first half of 2021, and 0.8% in the second half.

In 2020, consumers spent more than normal on healthy, nutritious foods associated with strong immunity, such as dairy, especially in Asia.

However in less developed regions, Bord Bia expects reduced dairy demand in 2021, and predicts a less competitive Euro against the dollar, making the US and Oceania favoured trading partners for Asia in particular.

Carried forward stocks and undersold positions added to fresh production may bring lower prices, and expiration of government supports for consumers may also hit demand.

Bord Bia said early removal of US tariffs on EU exports of alcohol and dairy products is unlikely, but the presidential election result may bring some favourable change to elements of US trade policy. Despite tariffs, passed directly onto consumers, there was a significant increase in the volume of Irish butter going to the US in 2020.

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