Tirlán pulls back August milk price by over 2c/L
Tirlán has announced that it will reduce its milk price to farmers by over 2c/L for August milk.
Tirlán will pay a total of 46.08c/L including VAT for August creamery milk supplies at 3.6% butterfat and 3.3% protein.
The August milk price consists of a base milk price of 45.58c/L including VAT, a reduction of 2.5c/L from July; and a Sustainability Action Payment of 0.5c/L (including VAT) for qualifying suppliers.
The base price and Sustainability Action Payment will be adjusted to reflect the actual constituents of milk delivered by suppliers, Tirlán said.
The average price paid by Tirlán for August creamery milk, based on delivered constituents, will be 54.1c/L including VAT.
Commenting on the milk price for August, Tirlán chairperson John Murphy said: "The board recognises that many of our farmers will be disappointed by this month’s reduction in milk price.
"However, it is necessary to align our farm gate price with current market returns," Murphy added.
“The primary reason for this adjustment is the sudden and sharp decline over recent weeks in international market prices for key dairy products, particularly butter and cheese.
“This downturn has been driven by a rebound in global milk supply. After a period of constraint, volumes and constituents began to recover in the second quarter of this year and have continued to rise," the Tirlán chair said.
"Increased production across major dairy-exporting regions has been supported by favourable weather conditions, a strong milk-to-feed price ratio, and minimal impact from animal diseases," he added.
Murphy said the board will continue to monitor market developments on a monthly basis.
Tirlán's announcement comes towards the end of the run of price announcements from dairy processors for August milk.
Tirlán's milk price cut was not the largest decrease in price this month.
This week, the Dairygold board decided to reduce the August quoted milk price by 3c/L to 45c/L.
The processor said the price is based on standard constituents of 3.3% protein and 3.6% butterfat, inclusive of sustainability and quality payments, and VAT.
This compares to a price announced last month for July milk of 48c/L.
Commenting on the board’s decision, Dairygold chairperson Pat Clancy said: “There has been a dramatic deterioration in global dairy prices over the last three to four weeks. Increased global milk supply and weaker consumer sentiment have seen key Dairygold products, especially butter and cheese, fall by well over 3c/L.
"The speed, timing and extent of the market falls is challenging, as they emerge after the peak processing period, with seasonally higher stock levels exposed to these declining market returns," Clancy added.
