Lakeland holds but others cut

Several milk processors have now declared their prices for December supplies.

Lakeland Dairies was first to declare its hand, announcing on Friday that it would continue to pay a butter bonus of 1p/l on top of its base price, which held at 29p/l.

The additional 3p/l winter bonus puts its suppliers on an all-in base of 33p/l, a strong price given what others are now paying in NI, and the recent trends seen in commodity markets.

Glanbia Milk also announced its base price would hold again at 29.4p/l.

Including its year-round 0.6p/l “Fermanagh bonus” brings its suppliers to an all-in base price of 30p/l for December.

While there has been no move in the Glanbia price since September, the co-op has announced that it will extend to its NI supplier base the 1.05c/l bonus payment on all milk delivered from July to December.

After deducting VAT and converting to sterling, the bonus amounts to 0.88p/l. For a one million litre supplier, with a normal seasonal supply, this is an additional £3,980 in income, and will be paid in the December cheque.

Glanbia Milk made a similar payment back in September for all milk supplied during the first six months of 2017.

Price drop

The recent slump in commodity markets has started to filter through to a local level with various other processors announcing price cuts and, in some cases, the first reductions since March 2016.

Dale Farm is correcting its price by 1p/l, leaving the co-op on a base of 28.7p/l.

Applying its 0.3p/l loyalty bonus and 2p/l winter bonus, it puts suppliers on an all-in base of 31p/l for December.

Omagh-based Strathroy Dairies has made a similar move, with a 1p/l cut to its base price, bringing it to 29p/l plus its 1p/l winter bonus.

The reduction at Glanbia Cheese is 0.75p/l, taking the Magheralin-based processor to a base of 28.5p/l, but with a 2p/l winter bonus.

GDT

This week’s GDT saw a second successive positive outcome with the index price rising 4.9% to US $3,310/t. This follows a 2.2% increase at the first auction of 2018, after Fonterra cut volumes traded on the back of lower supply forecasts.

At the latest auction, butter prices rose 8.8% with cheddar up by 5.2%. Whole milk powder rose by 6.5% with skim rising 5.1%, albeit from a very low base.