International milk prices – the pain continues
Milk prices internationally continue to fall in October and it appears that dairy economies reliant on the commodity export market like Ireland and New Zealand are bearing the brunt of the volatility in the marketplace.
Having maintained a relatively steady price for the first six months of the year Arla Foods, Denmark, has steadily dropped its price since July. Arla’s October price for equivalent Irish average milk solids is 4.6c/L lower that its July price.
Similarily, Dutch based Friesland-Campina’s October price is 2.4c/L lower than in July.
Farmers in New Zealand are continuing to feel the pain. End of season forecast milk price for Irish equivalent milk solids currently stand at 24.94c/L. This is a far cry from lasts years end of season pay-out of 37.5c/L, a reduction by almost one third.
To date, not all Irish co-ops have released their September prices. Announcements from leading Irish milk buyers Glanbia, Kerry and Lakeland suggest that Irish dairy farmers can expect a 2-3c/L cut in their milk statements in September.
The only bright spot internationally are US milk prices. US Class III milk prices showed an upward spike of more than 6c/L in September. This is largely explained by a massive 30% jump in the butterfat component price, on account of existing low inventories of butter stocks. Indications are that this price hike is temporary. Chicago Mercantile Exchange (CME) futures prices for USA Class III milk indicate price drops are also on the horizon for American dairy farmers.