Aurivo is paying 28c/L (including VAT) for June milk, down 2c/L on the previous month.
“We have no option but to reflect current market conditions in the price that we pay our farmers,” said Eoghan Sweeney, the co-op’s general manager for dairy.
“International dairy markets are driven by supply and demand. There is just too much milk in the world at the present time. And we have seen further evidence of this over the past few days with the Global Dairy Trade auction in New Zealand falling by a further 11.0%.”
Aurivo sells all of its dairy exports through Ornua: the co-op’s portfolio of products comprises enriched milk powders and butter.
“And we have no plans to change these arrangements at the present time,” said Sweeney.
“Intervention or aids to private storage are not realistic options. We are committed to getting the best possible price for our products from the commercial markets.”
Sweeney confirmed that milk supplies to Aurivo are approximately 10% up, year-on-year. And he foresees this trend continuing over the coming months
“May, as expected, turned out to be the peak supply month. But volumes have been maintained throughout June. And there seems to be every expectation of our suppliers maintaining on-farm performance levels.
Sweeney said that Aurivo has signed up 20 new entrants since quotas ended, with just two existing suppliers moving to other co-ops.
“Our advisors are working closely with the new entrants to ensure that they are driving forward efficiency on their farms. This work has been undertaken as part of our Farm Profitability Programme. And it is an approach that is working well.
“We have established six focus farms, one for each of our regions. Teagasc and other stakeholder organisations are working closely with Aurivo team on the farm profitability project, which was launched at the end of 2013. The coming weeks will see a number of Open Days hosted by our Focus Farmers.”