Irish dairy processors Kinisla and Lakeland Dairies have announced higher milk prices for August supplies, reflecting improving dairy market conditions and a gradual slowdown in global milk production growth.
Kinisla increased its August milk price by 0.5c/L, while Lakeland Dairies raised its Republic of Ireland base price by 0.6c/L compared with July. Meanwhile, Ornua’s Purchase Price Index (PPI) increased slightly in August, although its indicative milk price return remained unchanged.
Kinisla Increases August Milk Price
Kinisla has set its August milk price at 39.6c/L, including VAT as well as quality and sustainability bonuses.
Based on Kinisla’s average milk solids for August, the processor said the milk price return, including VAT, quality and sustainability bonuses, reached 45.21c/L.
The processor reported that demand for dairy products remains strong, while the growth rate of milk production has started to slow slightly.
According to Kinisla, the changing supply-demand balance is continuing to provide support to dairy commodity markets.
Lakeland Dairies Raises Milk Price
Lakeland Dairies has also confirmed its August milk price for suppliers in the Republic of Ireland.
The processor will pay a base milk price of 39.1c/L, including VAT and the 0.5c/L Sustainability Incentive Payment. The price is based on standard milk constituents of 3.6% butterfat and 3.3% protein.
The August base price represents an increase of 0.6c/L compared with July.
Lakeland said the average payout for August milk will be 44.7c/L.
For suppliers in Northern Ireland, Lakeland will pay a base price of 31.4p/L for August milk, also including the Sustainability Incentive Payment. This represents an increase of 0.5p/L.
Market Conditions Show Improvement
Lakeland said dairy market conditions continued to improve throughout August.
Although global milk production remains at relatively high levels, the rate of production growth is slowing. The processor expects this moderation to help improve the balance between global milk supply and dairy demand over the coming months.
A slower increase in milk production could provide continued support for commodity prices if dairy demand remains firm.
The developments also highlight the importance of milk supply growth and demand conditions in determining farmgate prices across major dairy-producing regions.
Ornua PPI Rises in August
Elsewhere in the Irish dairy market, Ornua’s Monthly Purchase Price Index (PPI) increased marginally in August.
The Ornua PPI rose to 130.4 from 130.2 in July. However, after estimated processing costs are deducted, the index indicated a milk price return of 36.2c/L.
The indicative return includes 4.5% VAT and is based on milk containing 3.6% fat and 3.3% protein.
Despite the increase in the PPI, the indicative milk price return remained unchanged from July.
Dairy Market Outlook
The latest milk price announcements point to relatively firm market conditions for Irish dairy suppliers.
Strong demand for dairy products, combined with a gradual moderation in global milk production growth, is helping to support commodity markets.
However, milk production remains high globally, meaning future price movements will continue to depend on the pace of supply growth, consumer demand and international dairy commodity prices.
For Irish dairy farmers, the August announcements provide a mixed picture across processors, with Kinisla and Lakeland increasing payments while Ornua’s indicative return remained stable.
