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This week, Ornua lifted the purchase price index (PPI) to 103.8, up from 103.5 in August. Ornua said this reflects stable butter and cheese prices and improved powder returns for the last number of weeks.
It says this is the milk price equivalent of 29.3c/l ex-VAT (30.9c/l including VAT) based on Ornua’s product purchase mix and assumed costs of 6.5c/l.
Since then, dairy markets have gotten even stronger. Next week, most co-op boards will meet to set milk price for September. The trend on global dairy commodities is positive. This week, butter prices lifted to €3,510/t and cheddar over €3,080/t, up from €2,900/t a couple of weeks ago.
IFA’s Tom Phelan is calling for an urgent halt to the milk price slide
On the supply side, some of the big European players, namely France, Germany and the Netherlands, are well back in terms of supply. Latest figures suggest France is back 1.1% compared to the same period last year, Germany is back 0.7% and the Netherlands is back 2.6%.
August milk prices for Dairygold, Arrabawn and Glanbia were €3.80/kg milk solids or 27c/l ex-VAT at 3.3% protein and 3.6% fat after milk price cuts for the last two months.
The three Irish co-ops included in the European LTO milk price review (Glanbia, Dairygold and Kerry) are the lowest payers for August 2019
Farmers will be watching any further price cuts closely. IFA’s Tom Phelan is calling for an urgent halt to the milk price slide for three reasons – Irish co-ops are lagging behind EU prices, there is a widening gap between Irish co-ops, and commodity prices are improving.
He said: “The three Irish co-ops included in the European LTO milk price review (Glanbia, Dairygold and Kerry) are the lowest payers for August 2019, almost 4c/l below the European average.”
Improvement
ICMSA’s Gerald Quain said: “The market situation has improved noticeably since the start of September and, put bluntly, ICMSA believes that no co-op should be paying less than 30c/l for milk supplied last month.
"The differential in milk price between the lowest and highest paying co-ops is very stark and simply cannot be justified by those co-ops at the bottom.”
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