This is a subscriber-only article
LacPatrick Dairies has applied a cut of 1p/l to its October milk price, putting the co-op’s NI suppliers on a base price of 26.5p/l.
While there have been price corrections on October milk from other processors, the 1p/l reduction is the largest cut across all milk buyers of NI milk.
In addition, the co-op has confirmed that it is not in a position to pay a winter bonus on October milk. Last year this was worth an additional 2p/l.
The Irish Farmers Journal understands that a decision on whether to pay a winter bonus on milk supplied in November and/or December will be decided at respective monthly board meetings, and will depend on market returns.
Price gap
It means LacPatrick is now 1p/l behind its prospective merger partner, Lakeland, and 3.5p/l behind Dale Farm, which is paying off a base of 28p/l in October, plus a 2p/l winter bonus.
In a statement LacPatrick chariman Andrew McConkey said that the industry is now in the midst of a severe downturn in the dairy markets, which is on a par with 2016.
“The business we operate must reflect the realities of the market. We will continue to closely monitor the market in order to return the maximum possible price back to our farmers,” he said.
Staffing cuts
However, in a further measure to control operating costs, LacPatrick also announced cuts to Christmas bonuses paid to staff, which is understood to be worth two weeks’ pay.
Staff at all three LacPatrick plants were informed of this decision, with the company maintaining that urgent measures were required to reduce costs and support the survival of the business until the merger with Lakeland is complete in the new year.
Aurivo
Aurivo was the only other milk processor to set its price this week. After some deliberation, it has settled on a base of 27.25p/l, which is down 0.25p/l from the price paid the previous month.
However, there is an additional 2p/l winter bonus payable on October milk. There will be a full analysis of all prices paid in next week’s milk league.
September price
Elsewhere, DAERA has released analysis of farmgate milk prices paid in September.
Across all dairy farmers, milk prices averaged 29.31p/l, which is the second highest price for the year.
However, it is approximately 2p/l behind the same month last year when farmgate prices averaged 31.29p/l.
Milk production totalled 165.4m litres for September, compared with 159m litres in 2017. Year-to-date production is now 1.8bn litres compared with 1.75bn litres last year.
SHARING OPTIONS: