It was a good year for Irish milk prices for both farmers and processors. Milk volumes delivered increased significantly and processors are reporting year-to-date volumes up by 4% to 10% compared to 2016.
It was a good year for Irish milk prices for both farmers and processors.
Milk volumes delivered increased significantly and processors are reporting year-to-date volumes up by 4% to 10% compared to 2016.
If any business has a growing volume market and relatively high price, then it’s a good year. In Ireland, farmer ownership of the business through co-ops means they should get the better returns delivered back inside the farm gate. In other countries, private companies often take the premiums.
The bonuses might be only starting to come back to farmers. Already we have seen Glanbia pay a mid-year bonus and Carbery bring forward a bonus on top of 2017 annual supply.
Our monthly league figures showed the prices for milk ranged on average from €4.10/kg MS (29.3 c/l) at the start of the year to €4.80/kg MS (34.3 c/l). The 29c/l to 34c/l prices are for milk at 3.3% protein and 3.6% fat excluding VAT.
Most farmers are getting a higher price because their cows are producing milk that is better than the base in fat and protein. VAT is on top of these prices, so almost all farmers will receive an average price between 30c/l and 40c/l in 2017.
The big unpredictable for any year is weather and, in the regions where most milk is produced, 2017 wasn’t bad.
Heavy rainfall in the autumn has hampered some farmers, especially those on heavy soils. Stock has been housed since September and these farmers have incurred higher costs compared with last year.
Grass growth rate data mirrors the rainfall. It shows spring grass growth was up 30% on 2016 on recorded dairy farms. Summer growth was up 10% and autumn growth was down 12%.
Off-farm, it was a good year for companies servicing the dairy sector.
Feed companies benefited from extra dairy cows in the expanding herd. Calf exports increased, putting a floor under the spring calf trade. Milking equipment companies are busy with extensions and new developments. Semen companies report volumes purchased up compared with 2016, despite an unexpected dramatic fall-off in EBI figures at the start of the breeding season.
The milk processing sector saw new developments unveiled for Dairygold in Mallow, Lakeland in Bailieborough and LacPatrick in Artigarvan. These will help processors handle and add value to the extra milk as the dairy herd grows.
If a dairy farmer had a wish list for price, weather, grass growth and stock values, it would be very close to what actually happened in 2017. A good 2017 was needed after a number of poor milk price years, so here’s hoping 2018 can bring something along the same lines.
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