The Irish Creamery Milk Suppliers Association (ICMSA) predicts that co-ops will announce a milk price of 57c/L for July supplies, according to the association’s dairy chairperson, Noel Murphy.
Speaking ahead of the anticipated milk price announcements by co-ops, the ICMSA’s dairy chairperson noted that the Ornua base Purchase Price Index (PPI) is returning over 57c/L.
Ornua recently confirmed that it increased its PPI by five points to 184.4, which reflects a price of 57c/L, inclusive of VAT, based on Ornua’s product purchase mix and assumed member processor costs of 9.1c/L.
The ICMSA expects farmers’ return to hit the same amount paid for their milk supplied last month as, Murphy said, markets have stabilised at this higher level.
“Returns from across the globe remain strong in what has been a solid year so far for dairy products, despite the easing of prices on wholesale markets such as the Global Dairy Trade (GDT) in the last number of weeks.
“The minimum price that we’ll accept as [representing] that strong market is 57c/L going forward in the final quarter of the year,” according to Murphy.
Dutch dairy returns for butter and skimmed milk powder (SMP) fell below 60c/L in July, although prices above 60c/L had been returned since the middle of March, the dairy chairperson said.
He added that the ICMSA considers this pattern the “traditional settling down” and reduction in trading associated with the holiday period.
However, the ICMSA dairy chairperson said the underlying strength of this pattern, which has also emerged for whole milk powder (WMP), “cannot be doubted”.
GDT
The GDT recently continued its downward spiral, with the price index dropping by a further 5% in its latest trading event last week, its fourth consecutive fall since the auction on June 7.
Now standing at 1,163, the index has returned to levels which were last seen during August 2021. The average price achieved during trading event 313 was $3,913, with 27,500MT of product sold.
All of the dairy commodities offered for sale at the event recorded a drop in their average price. Butter milk powder (BMP) recorded the most significant drop of 9.2% to an average price of $3,724/MT.