Kerry Group is the first milk processor to announce a base price for milk supplied during the month of May.
The processor confirmed today (Thursday, June 9) that it will pay a base price of 51.5c/L, including VAT, at constituents of 3.3% protein and 3.6% butterfat.
This reflects an increase in price of 2c/L compared to the base price paid for April supplies (49.5c/L).
At EU standard constituents of 3.4% protein and 4.2% butterfat, the Kerry Group price converts to 56.39c/L.
Based on Kerry Group’s average milk solids for April supplies, the processor is expecting the average payment to be 54.69c/L inclusive of VAT and bonuses.
The announcement follows a call from the Irish Farmer’s Association for dairy processors to pay “a meaningful price” for May milk supplies.
The IFA said yesterday (Wednesday, June 8) that there was a danger of supply falling in the second half of the year due to the very high cost of production for farmers.
The association cited data from the Central Statistics Office (CSO) which shows that milk supply for the first four months of the year was lower than the same period for 2021, despite a significantly higher milk price.
“This reflects the massively higher cost of production on dairy farms,” said IFA dairy chairperson Stephen Arthur.
Arthur noted that “all milk indices” – including the Global Dairy Trade (GDT) index and the Ornua Purchase Price Index (PPI) – are trending higher.
This, he argued, is “indicating price increases into the medium term, mainly due to sluggish supply worldwide”.
“Now is the time for Irish processors to give confidence to dairy farmers at a time of ever-increasing costs, by setting a milk price for May that reflects the market,” Arthur commented.