Second processor announces milk price cut
The markets started turning towards the end of 2022 and have weakened very significantly in recent months.
Kerry Group is the second processor to announce a cut to its milk price for January supplies.
The Kerry Group base price for January milk is 50c per litre (Vat included) at 3.3% protein and 3.6% butterfat. This is a drop from the base price of 56c per litre for December milk supplies.
For January milk, the price is 54.76c per litre (Vat included) at EU standard constituents 3.4% protein and 4.2% butterfat.
Based on Kerry’s average milk solids for January, the milk price return inclusive of Vat and bonuses is 58.84c per litre.
Lakeland Dairies has also announced a cut to its milk price for January.
The board made the decision following consideration of all current market conditions, the processor said.
In the Republic of Ireland, Lakeland has reduced the milk price by 6c per litre to 52.85c per litre inclusive of Vat, for milk at 3.6% fat and 3.3% protein.
The January price includes an input support payment of 1.5c per litre, inclusive of Vat, for all suppliers.
In Northern Ireland, Lakeland has reduced the milk price by 5p per litre to 42.5p per litre.
The January price includes a supplementary input support payment of 1.5p per litre.
The markets started turning towards the end of 2022 and have weakened very significantly in recent months with growth in global milk supplies continuing, a Lakeland spokesperson said.
"High rates of inflation are affecting overall market sentiment. Demand has reduced, buyers have held back, exports have slowed and prices have eased considerably," the spokesperson added.
Speaking in recent days, Irish Farmers' Association dairy chair Stephen Arthur has said that sustaining milk price as peak milk production approaches "has to be a priority for every processor".
"The processors were slow to pass on returns when the market was rising but have no problem telling farmers that they will drop prices immediately now that the market is softening," Mr Arthur said.
"It is vital that our processors continue to support farmers in this high input environment. Our production costs remain high; therefore, we cannot sustain significant cuts to our milk price this spring."
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