The FrieslandCampina guaranteed price for raw milk for June 2015 is €30.50 per 100 kilogrammes of milk which is the equivalent of 29c/L when converted to Irish constituents.
The guaranteed price is €1.50 lower than in May 2015 (€32.00).
The company says the reduction of the guaranteed price is based on the expectation that milk prices of most od its reference companies in June will continue to decline.
This, it says is caused by decreasing quotations of various dairy products because of an increasing milk supply and a declining demand for dairy products.
Dairy prices continue to weaken, but some signs output growth slowing – IFA
In its latest update on the dairy market the IFA noted that dairy commodity prices have been weakening further on EU markets, and the last GDT auction registered a further 2.2% fall on May 19.
It says part of what is maintaining this price depression is buyers filling only short needs in the hope that prices will keep slipping as more milk comes on stream in the EU now that the quota is no longer a restriction.
The IFA also, says reports of New Zealand product stocks available for trade have also made buyers stand back.
However, it says there is no indication that EU output is set to grow massively in the short term (the next two to three months into the seasonal downturn).
Indeed, the IFA says France and Germany, which between them account for around 40% of all EU milk supplies, have seen their post quota supplies to date undershoot last year’s level.
The IFA also highlight the news of an official declaration of El Nino event over the SW Pacific affecting Australian production conditions, and a major, and continued drought in California, is also curbing production growth expectations in those regions.