Dairy Council Report December 2020

Milk Price

The Ornua PPI for October was 104.1 (30.2 c/L). This includes a 7c processing charge and does not include the Ornua Value Payment. This bonus amount increased significantly for September and October to €5.8m. Taking account of this, the IFA adjusted PPI amounts to 32.7 c/L, including VAT. 

	July	August	September	October
Ornua PPI	101.7	101.8	102.8	104.1
Ornua PPI (c/L)	29.3	29.4	29.7	30.2
Trading Bonus	€3.2m	€3.4m	€5.9m	€5.8m
Adjusted PPI (c/L)	30.29	30.8	32.1	32.7

The Farmgate price paid for milk (3.6% fat and 3.3.% protein) for the 7 milk processors listed below ranged from 31 c/L to 32.9 c/L, including bonuses and VAT. 

Processor	PROTEIN €/kg	c/L protein value	FAT €/kg	c/L fat value	VOLUME CHARGE	A+B-C	Bonus	VAT	Standard price
DAIRYGOLD	5.9107	20.09	3.612	13.39	4.00	29.48	0.65	1.62	31.76
KERRY	5.719	19.44	3.8126	14.14	4.00	29.58	0.5	1.62	31.7
LAKELANDS	6.45643	21.95	3.28791	12.19	3.50	30.64	0	1.65	32.29
GLANBIA	5.98	20.32	3.32	12.31	4.00	28.63	0.78	1.59	31
AURIVO	6.011	20.43	3.520	13.05	4.25	29.23	0.65	1.61	31.5
ARRABAWN	6.3202	21.42	3.1196	11.57	4.00	29.64	0.2	1.61	31.5
BARRYROE	5.9145	20.10	3.943	14.62	4.00	30.72	0.5	1.68	32.91

Domestic supply has increased by 3.2% to September YTD. Global supply is also strong with growth at 1.6%. this is forecast to increase to 1.6 – 2% by year end. After the initial shock of lockdown and the closure of foodservice outlets, consumption has recovered and is only back about 2-5%. Demand has remained steady so far, but it assumed this is due to countries stockpiling rather than a critical demand for product. 

Spot prices for commodities are relatively stable across each of the market indicators. 

	Butter	SMP	Cheese	Whey
GDT – 18th Nov	€3231 (0.4%)	€2357 (2.5%)	€3066 (-3.5%)
EU MMO – 15thNov	€3490 (0.6%)	€2150 (-0.8%)	€3090 (0.5%)
DL/NE/FR – 18thNov	€3348 (-0.25%)	€2157 (-0.8%)		€713 (2.39%)

The increase in exports reported for July YTD of 6% has been eroded. Exports up to the end of September are almost exactly the same as this time last year. Stockpiling earlier in the year may have accounted for increase. Infant Formula continues to perform well in China.

Country	Category	(€’000)	tonne	€/tonne	Volume% difference	Value % difference
Great Britain	Total	599362	214352	2796	-7.1	-15.7
	Butter	12855	3613	3558	-33.8	-35.1
	Cheese	39007	12497	3121	-29.6	-25.6
Germany	Total	305733	81508	3751	1.1	7.8
	Butter	13530	3889	3479	64.5	44.9
	Cheese	8409	2730	3080	23.0	26.0
Netherlands	Total	523560	215982	2424	10.4	-6.3
	Butter	24650	10080	2445	-0.9	91.1
	Milk Powder	7086	3528	2009	-58.4	-56.3
USA	Total	276239	43841	6301	-1.2	-0.2
	Butter	19057	3176	6000	17.1	-0.1
	Casein	6869	1014	6774	-6.5	17.0
China	Total	378707	80512	4704	-0.2	13.0
	Infant Formula	31999	4096	7812	34.0	44.0
	Milk Powder	5455	2368	2304	2.2	8.3
ALL COUNTRIES	Total	3827770	1202370	3184	-0.8	0.8
	Butter	90188	26467	3408	-8.6	-3.0
	Cheese	82118	25355	3239	-19.2	-16.8
	Infant Formula	65190	10256	6356	-1.7	2.1

We are currently lobbying all milk processors to deliver a milk price increase that reflects the Ornua PPI (including the Ornua Value Payment).  

Activities

Meeting with DAFM – Nitrates 

• Current derogation due to end December 2021
• Final decision on derogation for 2022-2025 wont be made until September 2021
• Suggestion that more conditionality would be placed on larger herds (>200 cows)
• 5000 farmers are stocked between 170-210kgN/ha
• 7000 farmers are stocked above 210kgN/ha
• Eastern European Member states cannot apply for derogation
• New measures introduced in the new SI 40/2020. All farms stocked over 170kg (INCLUDING THOSE THAT EXPORT SLURRY) must:
  •  feed concentrate of less than 15% crude protein from 1^st April to 15^th September. 
  • Adopt a liming programme 
  • Use LESS for slurry spread after the 15^th April 2021
  • Not use watercourses as a source of drinking water and Fence watercourses 1.5m from top of the bank – permissible to cross cattle across watercourses to get to land parcels. 
  • The excretion rate for dairy cows has increased from 85kgN/year to 89kgN/year. This will increase your Stocking rate next year. 
• Key issue -> will the suite of actions brought in under nitrates exclude intensive dairy farmers from participation in an eco-scheme? Need to ensure suite of actions are applicable and practical for dairy farmers. 

Calf at foot trial 

• To take place this Spring in Moorepark
• Calves will be left with cows for first 8 weeks under various scenarios 

Calf Stakeholder Forum 

• 707,540 dairy cows (total = 1581038 cows) had a beef sired calf this Spring 
• Dairy AI inseminations increased by 7% 
• The use of Jersey straws fell by 10% 
• The use of Beef straws increased by 2.5% 
• 70% of dairy replacements AI bred
• 370,000 dairy sire male calves
• 350,000 beef sire dairy males calves – 19% AI sire, 36% stock bull, 45% no record of sire
• Though the live export of calves was down this year (140k – 2020, 192k – 2019), the number of Fr Bull calves that were exported increased (120k – 2020, 113k – 2019). 
• Calf prices in the Netherlands for the veal trade currently €65/€70 – usually €110/€120 per head

Meeting with Teagasc on calf exports 

• 5-year project on calf exports
• Trialing a slow release feed to overcome long journey times – prelim data due before Christmas
• Pilot flight of calves to Europe next Spring 
• Door to door costings sought to compare flying calves to roll on roll off

Dairy beef scheme 

• Proposed €20 per calf weighed
• Enough funding for 250k calves, approx. 900k would be eligible 
• All breeds if calves currently eligible 
• Ambition within the Dept. to build upon these schemes
• Dairy Beef programme being put forward to the CAP strategic plan for approval 

ASSAP meeting 

• Farmer meeting to take place on Zoom 
• 1655 farm assessments have now been completed 
• 96% engagement rate 
• New list of catchments being drafted for the third cycle of the river basin management plan. 

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Tom Phelan – Chair

Aine O’Connell – Executive