The July milk price cuts have now been followed up with August price cuts, bringing the base price down to average €4/kg milk solids at 3.45% protein and 4.10% fat. This is the equivalent of 28.5c/litre in old money, ex-VAT at 3.3% protein and 3.6% fat. The reality is 28c/l in August 2019 will only leave marginal profit for the best suppliers if all costs were accounted for.
The July milk price cuts have now been followed up with August price cuts, bringing the base price down to average €4/kg milk solids at 3.45% protein and 4.10% fat. This is the equivalent of 28.5c/litre in old money, ex-VAT at 3.3% protein and 3.6% fat.
The reality is 28c/l in August 2019 will only leave marginal profit for the best suppliers if all costs were accounted for.
August milk price cuts have disappointed farmers because the opposite is happening in European and global markets as butter, cheese and powder markets are all rising. Some experts suggest the rising oil price could lift markets even further.
August milk prices further reinforce big gaps between co-ops in Ireland.
The supply side is tight on butter as European production is back as discussed previously. The other market activity that should be positive for price is increased buying prior to the 31 October Brexit deadline as traders stockpile.
The gap between Division 1 and Division 3 remains very significant. There is still 0.40c/kg MS or 3c/l of a difference between the west Cork co-ops and the big players Glanbia and Dairygold. Remember the prices listed for the west Cork co-ops exclude a 0.5c/l SCC bonus for milk supplied less than 200 SCC, so plenty of the west Cork farmers are getting that as well. For the average herd, like for like, the Drinagh August milk cheque will be better by €1,752 compared to Glanbia (see Figure 1).
Kerry boost
Kerry farmers got another boost, on top of the arbitrator ruling, as Kerry held price for August so now it is 0.14c/kg MS (1c/l) ahead of Dairygold and Glanbia.
Aurivo continues paying well and only cut August by 0.25c/l to bring price to €3.98 c/kg MS very close to Lakeland behind the west Cork contingent.
Similarly, Lakeland continues to perform well ahead of the other big southern players as it has all year to date. Lakeland only cut price by 0.75c/l for August to bring its ranking price to €3.99c/kg MS, a good 0.2c/kg MS (1.5c/l) ahead of Dairygold and Glanbia.
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Co-ops must not let Glanbia set their August milk price – IFA
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