Lakeland Dairies will reduce the price it will pay for milk supplied in July in both the Republic of Ireland and Northern Ireland.
It will pay a price of 35.5c/L for milk at 3.6% butterfat and 3.3% protein for July milk in the Republic of Ireland.
This represents a reduction of 1.85c/L on the June price.
In Northern Ireland, Lakeland Dairies will pay a base price of 28.5p/L for milk supplied in July. This represents a reduction of 1.5p/L on the June price.
According to the board of the co-op, which processes in the region of 1.8 billion litres of milk annually, the price set for milk supplied in July “represents market conditions”.
Lakeland Dairies
In a statement, the board of Lakeland Dairies said: “Global demand for dairy products remains sluggish.
“This weak demand is being met by resilient milk supplies in many of the larger production areas, resulting in a continued imbalance between supply and demand.”
It also warned that “subdued sentiment” from international buyers is being heightened by an economic slowdown in many parts of the world, particularly in relation to China and Asia.
“Lakeland Dairies continues to closely monitor the markets in order to return the best possible milk price for our 3,200 farm families,” the board stated.
Ornua
Ornua has also warned that there had been “weak market returns and weaker demand through the month of July”.
The latest Ornua Purchase Price Index (PPI), for the month of July, showed a further drop in milk price.
Ornua confirmed that the PPI figure for the month of July is 121.3, down from 124 for the previous month.
When accounting for estimated co-op processing costs of 7.5c/L (including an energy cost element that varies month-to-month depending on energy costs) for the Ornua product portfolio, and excluding any allowance for processor margins, the latest index figure implies an indicative return of 35.9c/L, including VAT.
This is 0.8c lower than the price for June, which stood at 36.7c/L.