Listen: €80m May milk price boost

Dairy farmers are set to receive an extra €80m in their May milk cheque compared with the same month last year, driven by higher production and higher milk prices.

Milk prices for May 2017 are some 7.5c/l to 8c/l higher than May last year.

In May 2016, CSO statistics showed monthly domestic milk intake was estimated at 918m litres. This year, farmers have delivered an additional 6% to 8%.

Processor tallies would push May milk up by between 55m to 75m litres to a total May milk supply of short of 1bn litres.

Payment boost

This increase in production, coupled with an increase in milk prices, will see milk cheque payments boosted for May. Four co-ops have increased their May milk prices this week by 1c/l. Kerry has set a May price of 30.28c/l, excluding VAT, at 3.6% fat and 3.3% protein.

Earlier in the week, the boards of Glanbia, Carbery and Lakeland met on Tuesday, where they all also decided to increase their prices by 1c/l.

Listen to the views of Glanbia's director of strategy and supply development Sean Molloy in our podcast below:

Listen to "Glanbia's Director of strategy and supply development" on Spreaker.

Meanwhile, European butter markets have stabilised somewhat in the last week, with prices holding steady at the €5,500/t mark following weeks of extraordinary price increases.

However, with butter stocks completely depleted across Europe at present, the market is expected to remain tight for a number of months, keeping prices at current record highs.

Cheddar exports

On the cheese front, Irish cheddar exports to the UK in January to March fell by 6% to just over 13,100t.

Exports in March were particularly weak, with cheddar shipments to the UK down 23% to 4,200t.

While sterling weakness is undoubtedly having an effect, domestic production of cheddar in the UK is in expansion mode as milk volumes recover.

The UK industry produced 18% more cheddar between January and March this year, reducing the need for imports in the domestic market.

Additional reporting by Lorcan Allen.

Read more

Second units: the pros and the cons

Dairy trends: declining cheddar exports to UK a concern

Editorial: co-ops must do more on milk price transparency

Full coverage: milk prices