FrieslandCampina has increased its guaranteed milk price for raw supplies of milk for September by €1.25/kg.

This increase will bring the milk price for September supplies to €26.25/100kg or 25.37c/L in Irish constituents.

It is expected that the milk prices of the reference companies will increase in September, the Dutch milk processor has said.

“The positive development of the milk prices is caused by increasing quotations for almost all dairy base products, with butter and foil cheese as outliers.

“The milk supply in the EU is gradually decreasing with a more or less stable demand,” a statement from FrieslandCampina said.

The protein price in September 2016 is €428.50, the fat price is €214.25 and the lactose price is €42.85 per 100 kilogrammes.

The guaranteed price applies to 100 kilogrammes of milk with a protein content of 3.47%, a fat content of 4.41% and a lactose content of 4.51% and is exclusive of VAT. The amounts shown apply to an average supply of 600,000 kilogrammes of milk annually.

In February of this year, the Dutch dairy paid its farmer suppliers a total of €14.1m for limiting their milk supply between January 1 and February 11 this year.

FrieslandCampina paid its member dairy farmers a ‘bonus’ of €2.00/kg if they limited supply within this time period.

The temporary measure resulted in a reduction of the milk supply of a total of about 35m kg of milk in the past six weeks.

There was insufficient processing capacity available at the dairy due to a stronger growth in milk supply than FrieslandCampina expected, thus, the measure was needed.

Some 60% of member dairy farmers participated in the arrangement.