Liquid Milk Council Report March 2023

Market Report  

December Farm Gate Price at 3.3% Protein/ 3.6% fat   

All milk processors announced milk price cuts in the region of 5-7cpl for January and many have signalled further cuts in the next two months.  

In January global commodity prices declined but in the past 2-3 weeks markets have recovered. The European futures market for butter increased by 6.7% for the Mar23-Oct23 period to €5,221. Similarly the futures price for SMP increased by 4.0% to €2,771 and the futures price for whey was up 1.6% to €770. 

European spot quotes increased for all product types. Butter was up 2.0% to €4758. SMP was up 2.4% to €2577 and whey was up 2.2% to €697. Whole milk powder saw the smallest gain of 0.4% to €3577. 

The latest GDT reported a decline of 1.5% (after a gain of 3.2%) to $3414 but the butter and cheddar index increased by 3.8% and 1.5% respectively.  

Activity since last National Council 

The cuts in milk price in January were devastating for liquid milk producers since January is a peak milk producing month for the autumn calving herd. Cuts in the magnitude of 5-7cpl effectively erode the liquid premium for liquid milk. The committee issued a press release calling on all liquid milk processors to pay the seasonality bonus to liquid milk producers to counteract the drop in milk price.  

We understand that the purchase of the Arrabawn liquid milk sales book by Aurivo is now complete.  

Upcoming issues 

• Of most concern to the liquid milk committee is the threat of cuts to the retail price for milk. As food inflation grows pressure could mount to cut the price of milk which would make the production of liquid milk unsustainable.