Kerry Group has become the second milk processor today (Monday, January 13) to announce a significant reduction in milk price for January supplies.
In an announcement this evening, the processor announced a price of 50c/L including VAT for milk at 3.3% protein and 3.6% butterfat.
This price is a decline of 6c/L on the 56c/L price announced last month for December milk.
Based on the average milk solids from Kerry Group suppliers for January, the average price per supplier, including VAT and bonuses, is 58.84c/L.
This announcement from Kerry Group follows on from confirmation earlier today that Lakeland Dairies would cut its own base price by 6c/L.
The price for Lakeland suppliers in the Republic of Ireland is is 52.85c/L including VAT for constituents at 3.6% fat and 3.3% protein.
This figure includes an input support payment of 1.5c/L including VAT for all suppliers.
Aside from this price, an early calving bonus of 1c/L will apply for all milk supplied in January.
In Northern Ireland, Lakeland has reduced the milk price by 5p/L to 42.5p/L, which also includes an input support payment of 1.5p/L.
Lakeland said that its cut to price follows “consideration of all current market conditions”.
In a statement today (Monday, February 13), the processor said: “High rates of inflation are affecting overall market sentiment. Demand has reduced, buyers have held back, exports have slowed and prices have eased considerably.
“This will have a continuing impact for all processors during 2023 and will continue to affect milk price, in line with weaker market conditions over the coming months,” the statement added.
The announcement of Lakeland’s price comes after the processor said last week that a price “correction” was on the cards.
The co-op highlighted to suppliers that, in the past number of months, dairy markets have “weakened significantly” with butter and skim milk powder (SMP) currently sitting around 40% lower than they were in September 2022.
In its correspondence to suppliers it pledged to “maximise the return” to members but it also sounded a cautionary note about market pressures at this time.