Aurivo increases its February milk price to 32.5c/L

Aurivo has announced that it is increasing its milk price for February supplies by 1.5c/L, bringing its base price to 32.5c/L.

The base price, which was set recently by the board of Aurivo, includes VAT and bonuses.

This follows on from the processor’s decision to increase its milk price last month by 1c/L, bringing its base price to 31c/L for January milk.

This latest price increase from Aurivo represents the eighth monthly milk price increase in a row.

Aurivo has decided to buck the trend by increasing its milk price for February supplies; the majority of other processors have decided to hold their prices at January levels.

Last week, Kerry, Dairygold, Glanbia and Lakeland Dairies decided to hold their milk prices for February.

Suppliers of Kerry will continue to be paid 31c/L, including VAT, for February milk. This is based on milk supplied at 3.3% protein and 3.6% fat.

Dairygold also announced last week that its milk price would remain at 31.5c/L for February, including VAT and bonuses.

Meanwhile, Glanbia Ingredients Ireland (GII) decided to hold its base price for February at 31c/L, including VAT, for manufacturing milk at 3.6% fat and 3.3% protein.

A base price of 31.28c/L, including VAT, will be paid to all suppliers of Lakeland Dairies for February milk.

A February milk price of 32c/L is ‘fully justified’

Meanwhile, Chairperson of ICMSA’s Dairy Committee, Gerald Quain, said last week: “A February milk price of 32c/L is fully justified and based comfortably on market returns”.

Despite the reductions in the Global Dairy Trade (GDT) auction last month, global demand for dairy products continues to grow at between 1.5% and 2%, Quain added.

“The low milk prices of 2016 have resulted in a sharp fall-off in milk supplies and the ICMSA expects this to continue for the first half of 2017, which will have a positive impact on market returns.

“The Ornua Purchasing Price Index returns for February 2017 remained fixed at 105.4 or 31.4c/L, but this is based on a processing cost of 6.5c/L which we’ve always felt is is overly generous to the processors.

Given that most processors failed to reach 31.4cpl for January milk, the ICMSA is calling on them to increase milk price to at least 32cpl for the milk they received in February.

The decision by some processors to not increase their milk price for February supplies is disappointing and is inconsistent with demonstrable market returns at this time, Quain said.

“It is simply a fact that the market is returning a better milk price than 31c/L”, he concluded.

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