Lakeland Dairies has become the first processor to announce its milk price for March supplies.
The processor will balance a reduction in the March milk price with a payment to support milk producers during the current very poor milk production conditions caused by bad weather and the fodder crisis, the co-operative has announced.
In a statement, Lakeland Dairies said: “Since late 2017, global market conditions have become very difficult – with a significant drop in the returns available across various product categories and most notably skim milk powders.
Taking all of the various factors into account, Lakeland Dairies has reduced its base milk price by 2.5c/L for March, but has offset this reduction through the payment of 2.5c/L support for all March supplies.
“This maintains the effective milk price payout for March at 34.56c/L including VAT and lactose bonus. Lakeland Dairies is continuing to support farmers to the maximum possible in line with market conditions.
“The co-operative is also continuing to provide fodder at cost to milk producers along with ongoing nutritional advice and assistance in this difficult period,” the statement added.
This decision follows on from last month’s decision to lower the February milk price by 1c/L.
Further drop for Ornua PPI
Ornua’s Purchase Price Index (PPI) has dropped further for the month of March, down from February’s index of 105.4.
According to the Irish dairy exporter, March’s figure of 100.4 works out at 29.6c/L, VAT inclusive, based on Ornua’s product purchase mix and assumed costs of 6.5c/L.
The March 2018 index reflects higher butter returns in the month, offset by lower cheddar and powder prices, the spokesperson added.
This follows a steep decrease in the index last month, where February’s index dropped to 105.4, down from January’s 111.3 figure.