Lakeland Dairies has increased the July milk price by 1c/L to 24c/L, VAT inclusive, a spokesperson for Lakeland has confirmed to Agriland.
This reflects a slight improvement in dairy market returns and a Lakeland recognition of difficult farming weather, the spokesperson said.
Poor profitability and cash flow difficulties on farms this year were also factors to the increase in milk price.
Lakeland Dairies is the first co-op to announce a July milk price and it is the first co-op to increase the milk price in months. The remainder of Irish co-ops are to set the July price over the coming weeks.
The rise in Lakeland’s milk price comes after the Ornua PPI, the monthly indicator of market returns on dairy products sold by Ornua, rose earlier this week for the first time in 16 months.
The PPI rose to 81.8 points for July, up from the 81 points the index had in June.
The PPI had dropped significantly over the 14-month period from March 2015 to May 2015, from 101.2 points to 81 points.
Returns on dairy products stabilised in June with prices holding steady.
Meanwhile, dairy product prices rose at last week’s Global Dairy Trade auction, with prices up 6.6% after several weeks of flat prices.
The auction saw whole milk powder (WMP) up 9.9% while rennet casein (RenCas) was the main mover, posting a 16.3% increase.
Skimmed milk powder (SMP) posted a small increase of 2.1% and butter prices were up by 6.6%. The only negative price was cheddar, which was down 0.8%.
The three previous Global Dairy Trade auctions all held steady, with two auctions posting no increases or decreases in prices, while the other was down marginally at 0.4%.
