Kerry Group has today (Tuesday, March 14) become the second processor to announce a cut to its base milk price for February.

Kerry will pay suppliers a base milk price of 44c/L, including VAT, for milk at 3.3% protein and 3.6% butterfat.

This marks a drop of 6c/L by the processor from the base price of 50c/L for January supplies.

Kerry announced a similar price drop from 56c/L for December milk.

The base price converts to 48.23c/L on the standard European constituents of 3.4% protein and 4.2% butterfat.

Based on Kerry’s average milk solids for February, the milk price return inclusive of VAT and bonuses is 50.66c/L.

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Yesterday (Monday, March 13), Lakeland Dairies also confirmed a further 6c/L cut in its milk price for February supplies.

The board of the co-op cited weaker dairy market conditions, which it said is having a serious effect on market returns.

In the Republic of Ireland, Lakeland Dairies has reduced the milk price by 6c/L to 46.85c/L including VAT for milk at 3.6% fat and 3.3% protein.

The February price includes an input support payment of 1.5c/L including VAT for all suppliers.

In Northern Ireland, Lakeland Dairies has reduced the milk price by 4p/L to 38.5p/L. The February price includes a supplementary input support payment of 1.5p/L.

It has been a difficult start to 2023 for the dairy sector.

Last Wednesday (March 8), it was announced that the Ornua Purchase Price Index (PPI) for February is 149.4, down from 162.4 the previous month.

This converts to a milk price of 45c/L for February including VAT, down from 49.1c/L for January.

This figure accounts for estimated processing costs for Ornua’s member co-ops of 8.5c/L, but excludes any allowance for processor margins.