October milk payments which landed into accounts last week were beefed up by rising milk prices and higher than expected milk yields.

On average over the last three years, October milk supply made up 7.7% of the annual total, and that is reflected in Figure 2. However, most farmers found that October milk supplies mirrored September deliveries and when higher fat and protein percent and higher milk price is taken into account, the October payment will have been higher than the September payment which rarely happens.

North Cork Co-op tops the league for October but only because it is paying out 3.11c/l from a reserve fund built up by withholding milk price in 2021. Without that payment, the North Cork base price is 46.77c/l which would put it in division three, along with Kerry, Dairygold and soon-to-be delisted Tipperary Co-op.

Looking at the gulf in price between Tipperary and everyone else, it should really be in a bottom division of its own. Interestingly, both Arrabawn and Tipperary increased by the same rate, at 0.57c/l excluding VAT, which together with Lakeland Dairies is the lowest price increase for October.

Aurivo paid the highest increase, upping its price by 1.13c/l excluding VAT, while Dairygold, Tirlán and the four west Cork co-ops increased by the 1c/l mark. On a kilo of milk solids basis, the average price is €6.676/kg MS excluding VAT.

In the monthly milk league, we take a kilo of milk solids as being made up of milk containing 3.55% protein and 4.20% fat, which is the national average from 2020. The A (protein) and B (butterfat) price per kilo and the C (volume deduction) is used to work out the milk solids price. It is this figure and not the c/l price that co-ops are ranked on in the league.

The actual fat and protein produced by farmers will differ from this base level and that is reflected in Figure 3 where the October milk cheque is worked out based on the co-op’s A and B price, with the average constituents produced by suppliers in that month based on the typical supply curve of a farmer producing 500,000l per year.

As an industry, we should be moving the conversation on from cent per litre (c/l) and put more focus on the euro per kilo (€/kg) MS price. While c/l is useful to look at when making historic comparisons, the gulf between the actual price received for milk and the base price at 3.3% protein and 3.6% fat continues to grow. The cumulative column in the table is the year-to-date sum of the milk payments outlined in Figure 2.