Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Cookies that are categorised as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience. Read our privacy policy here for more details.
Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Kerry, Glanbia Lift May Milk Prices as Fonterra Has Limited Impact on Strong Market Prices

IFA National Dairy Committee Chairman Kevin Kiersey said recent EU dairy market prices and spot quotes have seen little impact from the recent Fonterra auction price adjustments.

He said with limited supplies and sustained demand, returns from average EU dairy product prices continued around 45c/l before processing costs, and justified, as proven by the Kerry and Glanbia decisions, a major May milk price increase by all co-ops. “We have called on co-ops to consolidate April hardship bonuses into the base price, and to add at least 2c/l to that from May,” Mr Kiersey said.

“Last week, Kerry lifted their May milk price 2.86c/l to 36.26c/l + VAT. This week, Glanbia announced a price lift of around 1.9c/l to 35.3c/l + VAT, proving our argument that current market returns fully justify a major base price increase from May,” Mr Kiersey said.

“The early June 2013 Fonterra prices, despite 3 consecutive adjustments, remain 53% above a year ago. Also, the auction results appear to have little impact on current commodity prices. Early June average EU dairy product prices in Europe were stable at high levels of €3970/t for butter, €3090 for SMP and €3670/t for WMP. We estimate that these would return around 45c/l gross, before processing costs of 5 to 6 c/l,” he said.

“Even the EU spot quotes for last week, which ought to have been more influenced by the speculation underpinning the Fonterra results, have remained relatively stable at high levels. Dutch quotes this week were €4020/t for butter, €3700/t for WMP and €3100 for SMP,” he added.

“While the announcement by Fonterra of an increased milk price to NZ$7/kg MS will undoubtedly send a strong message to New Zealand farmers, a good early season which can reverse the current tight global supply situation will require some major improvement in pasture conditions by August or September,” he added.

“Meanwhile, market returns will continue at relatively high levels, comfortably justifying a significant milk price increase by all co-ops,” he concluded.

Related Articles