Stronger global dairy demand, lower US supply and Fonterra continuing to increase milk prices point to positive milk price indicators for Irish milk suppliers.

The big European players have already set March milk price between 46c/l and 48c/l.

The average January price below is 38c/l, including the January bonuses, so plenty of room for more upward movement.

This analysis shows Irish January milk prices that arrived into bank accounts over the last two weeks.

The January milk league is of lower importance for spring milk producers, because the volume of milk delivered in January is very small, about 2% of annual supplies.

All the co-ops, except the four west Cork co-ops, have some sort of a January bonus.

Most of the big players have a 4c/l bonus except Kerry. Lakeland has a 5c/l seasonality bonus.

However, this is conditional on other supplies so it’s not included in the league table.

Flashback to January 2023 and milk price fell 6c/l to around 50c/l – one of the largest monthly cuts in milk prices ever.

This year, there is much more stability in markets and the GDT continues an upward trend.

FrieslandCampina is gone to a guaranteed 46.5c/l for March milk.

GDT auction results show us that the last 12 auctions all rose except for one auction in November.

Cumulatively, the gain is almost 30% since last September.

Remember, half of the product sold on the GDT is whole milk powder so it’s a good barometer of WMP prices.

Annual US milk supply

The USDA reports that the annual US milk supply in 2023 will amount to more than 102.5m tonnes. This was 0.02% lower than 2022.

US production per cow continues to increase. The recent Fonterra positivity was anchored in a lift in demand, primarily from the Middle East and South East Asia.

Given where input costs are right now for February, Irish milk suppliers will need more than what might be best described as breakeven milk prices to maintain supply into 2024.