Milk suppliers take early March milk price cut

The three big players cut their March milk prices by between 1.8c/l and 2c/l each. A 2c/l cut is the equivalent of €100 per cow cut in milk sales or €8,000 per farm for the typical farm with 80 cows.

Of those processors that have held March board meetings, Glanbia has the lowest price for March paying a base price of 27.5c/l. Lakeland Dairies is almost 1c/l ahead of them at 28.4c/l, and Kerry is a further 0.5c/l ahead of Lakeland at 28.9c/l excluding VAT.

Lakeland, which many would have expected to be most affected by the market disruption to the foodservice market, cut its milk price by 1.8c/l following a board meeting last Thursday. It is now at 28.4c/l at 3.3% protein and 3.6% fat. Kerry Group actually lifted February milk price by 1c/l and for March it has decided to cut its milk price by 2c/l bringing it from 30.8c/l to 28.9c/l.

Base price

The Glanbia base price now moves from 29.4c/l to 27.5c/l. It has a “share of GI profit” payment of 0.4c/l going out to milk suppliers.

Last week, Ornua moved to reduce the March PPI to the equivalent of 30.2c/l. Glanbia is now 2.7c/l off this Ornua price for March. Lakeland is 1.8c/l off the Ornua price and Kerry which is not a member but does some work with Ornua is closer to the Ornua price but still 1.3c/l below the Ornua PPI.

Last week, Ornua said pressure on butter and powders was the reason behind the March fall but cheese price stability was helping the market.

The Ornua index reflects the typical market return for a basket of butter, cheese and powder and subtracts an estimate processing cost.

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