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The two largest dairy processors in NI have announced price increases for January milk, helping to offset the removal of winter bonus payments.
Lakeland Dairies went up 2.5p/l, bringing suppliers to a starting price of 32.75p/l.
The 2.5p/l increase includes a 1.5p/l rise in base price once the co-op’s new 0.5p/l sustainability payment is factored in, along with an unconditional input support payment on all litres. This 1p/l payment has been introduced to assist suppliers through “a challenging winter period as inputs remain higher than historical levels”.
The co-op has confirmed that over 90% of its NI suppliers have committed to the new sustainability scheme, which applies from 1 January 2024. The remaining farmers who didn’t sign up are on a starting price of 32.25p/l.
Dale Farm
Dale Farm was first out with a base price last Friday, raising it by 1.5p/l. Dale Farm also has a new 0.5p/l sustainability payment, effective from 1 January 2024, but it is not being quoted separately from the base price.
The message from Dale Farm is that they need suppliers to take forward actions around sustainability to satisfy important customers, so the 0.5p payment will be built into the monthly base price. Around 95% of Dale Farm suppliers have signed up to the scheme.
Once the 0.3p/l loyalty bonus is factored in, Dale Farm suppliers are on a starting price of 34.55p/l, before deductions for milk transport.
MPI
With no winter bonuses paid for January milk, both the Lakeland and Dale Farm starting prices are effectively down 0.5p/l on December.
However, those January prices are running ahead of what the Ulster Farmers’ Union (UFU) milk price indicator (MPI) is currently projecting for the spring.
On Friday, the latest MPI fell 0.28p/l to 35.19p/l. After making deductions for milk transport and processor margins, the MPI points to base prices in the region of 32p/l.
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