There was significant fluctuation in the price of milk for May, with most co-ops cutting price, some co-ops increasing price and just one co-op holding it the same. What’s unusual is that global dairy markets are remarkably stable. If anything, the argument could be made that May milk price should have increased across the board, given that butter prices increased by €260/t between the time the April price was announced and the time the May price was announced. Milk powder prices were unchanged, while cheese prices having dropped by about €50/t over that time.

From what I can see, co-op boards have set the May milk price based on business realities rather than market conditions. Those co-ops that cut milk price say they were paying ahead of the market price, a point backed up by the Ornua PPI. But if that is the case, then why didn’t they cut milk price in March or April, or at least give that signal? Cynics will point to the fact that co-ops were looking for milk and encouraging farmers to feed cows well to deliver a high peak. To then cut the price six weeks after the peak milk was delivered has annoyed many. For the record, co-op boards are correct to pay the price that the business can afford. Equally, farmers are correct to question that price and ask can it be higher, should it be higher? Remember, May is the peak month for milk supply, so the May price has a huge impact on the overall annual price.

The four west Cork co-ops all dropped by 14c/kg MS, but are still paying the top price for May. Dairygold, Tirlán and Centenary all go from division two to division three for May. Tirlán takes the bottom spot, just below the Dairygold price. Dairygold has gone from 1.63:1 to 1.5:1 protein to fat ratio for May milk. This keeps them off the bottom of the league for May, even though their c/l price is the lowest. Centenary Thurles pays a small SCC bonus, which keeps it ahead of Tirlán and Dairygold.

Lakeland Dairies and Arrabawn Tipperary both increased May price by paying a “bonus”. Suppliers will be wondering if this bonus will hang around for June milk. Also, Arrabawn Tipperary paid this on a flat basis, not adjusted for solids. With Tirlán, Lakeland and Dairygold in division three, almost two-thirds of the national milk pool are getting the lowest prices.