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The board of Carbery Group has cut milk price by 1c/l for August milk. It will pay 29.8c/l, which includes a 1c/l support from the Carbery Stability Fund, but excludes VAT. This will be replicated across the four co-ops: Bandon, Barryroe, Lisavaird and Drinagh.
Carbery said the cut was a result of continuing weakness in the dairy markets, particularly around cheese and butter. It said it would continue to monitor the market going forward.
Why have Irish co-ops been cutting milk prices several times since the beginning of 2019?
Farmer concern
IFA dairy chair Tom Phelan has asked co-ops to address farmers’ questions as to why milk prices are falling, and why they have fallen so much behind European levels.
"Why is the gap between the PPI, the price co-ops pay and farmers widening?" he asked.
“Average EU dairy market returns, spots and futures have all been inching up in recent weeks. Friesland Campina, one of the largest European co-ops, which buys milk across borders, has held its €35/100kg (30.57c/l Irish equivalent) price for July to September,” he said.
“For Arla, another major co-op buying milk in several member states, September was the eighth month of stability. So why have Irish co-ops been cutting milk prices several times since the beginning of 2019?” he asked.
“Well respected and Europe-wide, the LTO monthly milk price review is published by Dutch farm organisation LTO, and includes three Irish co-ops: Dairygold, Glanbia and Kerry.
"In the last year, the gap between the average of the LTO review and the average paid by the three Irish co-ops has increased from €1.30/100kg in July 2018 to €3.60/100kg in July 2019," Phelan said.
"We recognise that markets have eased in the last year. However, Irish milk prices seem to have fallen more than most. Irish co-ops have been diverging away from European pricing trends and undershooting the Ornua PPI for the majority of the last 11 months," he added.
Global Dairy Trade
Meanwhile, at Tuesday’s Global Dairy Trade (GDT) auction in New Zealand, prices across the index were up by 2% to average $3,303/t (€2,986.32/t).
Whole milk powder (WMP) was up 1.9% to $3,133/t (€2,832.62/t), and skim milk powder rose by 3.4% to $2,599/t (€2,349.58/t).
Butter prices rose 2.7% to $4,129/t (€3,732.37/t). Cheddar prices rose by 0.4% to $3,846/t (€3,476.64/t), while the price of anhydrous milk fat rose by 0.6% at €4,129/t (€3,732.47/t).
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