Barryroe Co-op tops the KPMG/IFJ Milk Price Review for the fourth year in a row

West Cork co-op Barryroe has topped the annual Irish Farmers Journal/KPMG milk price review for the fourth year in a row with a price of 31.21 c/litre delivered to the farmer once you exclude levies and collection charges.

The other three west Cork co-ops take up second, third and fourth position (Table 1). The average milk price paid in 2015 was 29.26c/l, which was well back from the average 36.31c/l paid out in 2014 and 37.76 in 2013. The 2015 figure is much closer to the 30.81 c/litre paid out in 2012 and reflects the 15% to 20% swing in milk price possible from year to year.

The four west Cork co-ops that trade under the Carbery banner keep the big players out of the top four positions but Glanbia, the largest processor in the east, is in fifth. Some farmers will wonder how Glanbia averaged so high, but this price includes all money paid out on litres delivered. Remember, money paid out on higher fixed milk price offerings that some Glanbia farmers voluntarily took on is also included.

Glanbia has been consistently outside the top five for a number of years until last year when it finished fourth. The other large and expanding co-op in the south, Dairygold, slips from second position in 2014 down to seventh position for 2015. Dairygold had been hovering around the top five for the last number of years but the combination of expansion costs and lower output prices means it slips closer to where it was in 2009 compared with the other Irish processors.

In between Glanbia and Dairygold is Tipperary Co-op with a price of 29.3c/l, behind Glanbia at 29.74c/l. This is a good result for Tipperary and matches its previous best position in 2013 of sixth. Tipperary joined the milk price analysis exercise in 2008 (see Table 2).

Kerry is in eighth position in the milk price review table with 28.42 c/litre, one spot better than 2014. For the last 10 years it has hovered between position seven and nine compared to other processors in the review.

Arrabawn and Aurivo share ninth position in the review, similar to last year. There is nothing to separate the two midlands and western based co-ops on price. The price they delivered is €153 per cow back on the top price paid by Barryroe and about €80 per cow back on what Glanbia delivered to its suppliers last year.

Similarly, there is very little between the final two processors at the back of the field, with LacPatrick (formerly Town of Monaghan) just pipping Lakeland by 0.04c/litre to claim 11th spot with a price of 27.86 c/l compared with a price of 27.82c/l for LacPatrick. Both co-ops are paying about €170 per cow less than Barryroe on top (Figure 1).

Click here for pdf of graphs

Some of this is explained by the fact both co-ops get poor fat and protein compared with the co-ops higher up the table. In the same way, however, they benefit from a higher proportion of milk delivered in November, December and January - a flatter milk supply profile.

In Table 1 and Figure 4 we have highlighted the proportion of annual manufacturing milk supply delivered during the winter months for all processors (November, December and January) and the peak to trough

ratio.

Much of this out of season milk qualifies for a winter milk bonus in an effort to compensate farmers for the higher costs of producing milk during winter. The KPMG milk price review examines the price paid for manufacturing milk and excludes all milk bought for or used in the liquid milk market.

Respective responsibilities:

The participants are responsible for extracting the information, as set out in the schedule above, from their books and records. It is our responsibility to review this schedule, based on the records, information and explanations supplied to us by the participants. The participants, in respect of the year ended 31 December 2015, were as follows:

Arrabawn Co-operative Society Limited

Aurivo Co-operative Society Limited

Bandon Co-operative Agricultural & Dairy Society Limited

Barryroe Co-operative Society Limited

Dairygold Co-operative Society Limited

Drinagh Co-operative Society Limited

Glanbia Ingredients Ireland Limited

Kerry Co-operative Society Limited

LacPatrick Dairies Limited

Lakeland Dairies Co-operative Society Limited

Lisavaird Co-operative Creamery Limited

Tipperary Co-operative Creamery Limited

Based on the procedures agreed with the participants and performed by us, and having made reasonable tests and enquiries, the information provided to us in respect of the year ended 31 December 2015 on the above schedule reflects:

(1) The average price payable to own suppliers for manufacturing milk

(2) The amounts deducted by way of collection charges and levies, and

(3) The average butterfat and protein content

Our report relates only to the table above entitled ‘Summary of Results - year ended 31 December 2015’

- KPMG, Chartered Accountants, 90 South Mall, Cork

Notes on and forming part of report to the Irish Farmers Journal

(i) This represents the average price of manufacturing milk, defined as milk purchased under a manufacturing contract and used in the manufacturing milk process, including quality, seasonal incentive and other bonuses and net of quality, inhibitor and other penalties. For the purposes of this Manufacturing Milk Price Report, liquid milk, as defined, is sold for human consumption, is not purchased under a manufacturing contract and is not used in the manufacturing process.

(ii) Levies comprise Irish Dairy Board, Dairy Inspection, Bovine Disease, NDC, Teagasc and certain other levies which are compulsorily deducted from milk suppliers, based on litres supplied.

(iii) Prices are stated in cent per litre (cpl) exclusive of VAT.

(iv) Milk prices are not determined in all cases by reference to butterfat and protein constituents.

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