Lakeland Dairies has reduced its milk price for January supplies to 50.09/l excluding VAT at 3.6% butterfat and 3.3% protein.
The price represents a 10% or almost 6c/l drop off the 55.78c/l excluding VAT the processor paid farmers for their December milk. It is the first significant drop in Lakeland’s milk price in over a year.
January’s milk price again includes an input support payment of 1.5c/l for all farmer suppliers to the co-op, including those on fixed milk price contracts.
The co-op is the first milk processor to announce its price for January milk following downward projections for dairy markets since 2023 began.
Northern Ireland
In Northern Ireland, Lakeland Dairies has reduced the milk price by 5p/l to 42.5p/l. This January price also includes a supplementary input support payment of 1.5p/l.
A Lakelands spokesperson said that dairy markets started turning towards the end of 2022 and have weakened “very significantly” in recent months, with growth in global milk supplies continuing.
They suggested that high rates of inflation are affecting overall dairy market sentiment.
“Demand has reduced, buyers have held back, exports have slowed and prices have eased considerably. This will have a continuing impact for all processors during 2023 and will continue to affect milk price, in line with weaker market conditions, over the coming months,” the spokesperson said.
The processor said it is acutely aware that any pricing adjustments create challenges for dairy farmers, as input costs remain high, but that it will seek at all times to maximise returns for milk suppliers.
Warning
The Lakeland Dairies milk price drop comes following a warning from the co-op’s CEO Colin Kelly.
Last week, Kelly said there will be a “significant milk price correction” this year, as a result of the weakened dairy markets.
Butter and skim milk powder markets are now around 40% lower than they were in September of last year, he told Lakeland’s regional committee members.
“Unfortunately, this is going to result in a significant milk price correction in the coming months. We are conscious that this will cause a lot of challenges at farm level as input costs look set to remain high for the moment,” he said.
