Liquid Milk Council Report July 2020

Milk price and Liquid Milk Market

• For liquid milk producers, the milk price this time of year is the creamery milk price;
• The National Liquid Milk Committee has been actively supporting the milk price lobbying effort by the National Dairy Committee, and will continue to do so in the weeks and months ahead.

The National Milk Agency, the statutory body in charge of securing the national supply of contracted fresh milk for the drinking market, has published its annual report for 2019. The following are some of the important headline issues it raises:

• National consumption fell 1m litres in 2019 to 578m litres.
• An estimated 75% of retail milk sales are in 2l bottles
• The number of contracted farmers fell by 69 to 1680, a 50% drop from the 95/96 levels – the year the NMA was first created. This reflects the lack of generational renewal and the decisions of farmers to cease liquid milk production because of the lack of profitability relative to the alternative creamery milk production system.
• 18% of suppliers, accounting for 22% of supplies, continue to be paid a flat (winter) milk price. The majority are paid on the basis of a constituent-based price + a winter premium (sometimes a small element of premium in summer, too).
• IFA has campaigned to create awareness among farmers that they stand to gain from being paid for their rising constituents over the winter months. The NMA report clearly shows that those types of pricing systems result in better remuneration for milk.
• The average price paid for all-year-round contracts fell 5% compared to 2018 to just over 35c/l including all available bonuses, but excluding VAT.
• Full details and liquid milk market information are available in the NMA annual report available here. 

Activities since last Council

• The creation of a broadcast only WhatsApp group for the Committee has allowed to ensure it remains very well informed of IFA and dairy activity;
• The Committee is developing a short strategic document for liquid milk to pursue some of the issues that have yet to be delivered from our 2017 strategy, and to feed into the National Milk Agency strategy for the next 5 years.

Upcoming issues

• Pending approval by National Council, the Committee intends to elect a new Chairman by postal vote, and have a virtual meeting to follow and formally hand over.
• The next meeting will also review, amend as necessary and approve the proposed strategy. This will then be publicised as part of the presentation of the new incoming Chairman.

Chairman	John Finn
Executive	Catherine Lascurettes