Strathroy Dairy has confirmed that it has paid a price equivalent to 38c/L (before bonuses) to its Republic of Ireland farmers for June milk. This is back 1c/L on its May milk price.

“We are committed to paying our farmers a competitive price. Our strategy moving forward is to build on our producer base not only in the South East but throughout the island. We are receiving enquiries from a wide geographical area” said Strathroy’s Ruairi Cunningham.

Commenting on the impact of this week’s fall of 8.9% in the average price paid at the Fonterra auction, Ruairi Cunningham said: “There is a global oversupply of milk powders at the present time. China, for example, is no longer the driving force in the market, as was the case earlier in the year. But that may well change again over the coming months.

“If this trend is continued then it may well have a downward impact on farm gate returns in this country. However, the key buffering factor in the equation is the reality that the Irish Dairy Board has forward sold a high proportion of this year’s milk output. And this factor alone should help to shield Irish dairy farmers from the recent volatility on world markets for a period of time.”

He said the remains very optimistic about the potential for dairy farming in this country. However, he warned that the type of volatility that we are seeing in world markets at the moment is an issue which the Irish dairy industry must factor in as it plans for the future.