Lakeland Dairies, the Irish dairy cooperative, has announced a reduction in its milk price for March due to the worsening global dairy market conditions. The co-op has reduced its milk price by 4 cents per litre in the Republic of Ireland to 42.85 cents per litre, inclusive of VAT at 3.6% fat and 3.3% protein. The March price includes an Input Support Payment of 1.5 cents per litre, inclusive of VAT, for all suppliers. In Northern Ireland, Lakeland Dairies has reduced the milk price by 3.5 pence per litre to 35 pence per litre. The March price includes a supplementary Input Support Payment of 1.5 pence per litre.
The processor has cited volatile economic conditions, reduced consumer confidence, and reductions in demand from dairy buyers as the reasons for the consistently lower market returns. Meanwhile, global dairy supplies continue to run ahead of these reduced demand levels. This has necessitated an ongoing correction in milk prices pending any return to more balanced supply and demand conditions.
Lakeland Dairies is seeking to implement any adjustments arising from this market correction as sustainably as possible in the full understanding that milk producers are operating in a high-cost environment. The cooperative’s intention remains at all times to pay as high a milk price as possible in line with currently unpredictable market conditions.
Colin Kelly, CEO of Lakeland Dairies, told Agriland earlier this week that milk prices are likely to contract even further in the short-term as markets continue to determine returns. The market today is lower than where, ultimately, the milk price is, so unfortunately a contraction looks inevitable in the short-term. The job of the board and management team in Lakeland is to set that. When you look at the market, it is returning less than where the milk price is today.
The dairy industry has been hit hard by the COVID-19 pandemic, with the closure of restaurants and cafes leading to a decrease in demand for dairy products. The closure of schools has also impacted the industry, with many children no longer consuming milk at school. The industry is now facing a period of uncertainty, with many farmers struggling to make ends meet.
In response to the crisis, the Irish government has announced a €50m aid package for the agriculture sector. The package includes a €30m fund for beef farmers, a €10m fund for the fishing industry, and a €10m fund for the horticulture sector. The government has also announced a range of measures to support the dairy industry, including a €15m fund to support the processing and marketing of dairy products.
The government has also announced a range of measures to support farmers during the COVID-19 pandemic. These measures include the deferral of tax payments, the extension of loan repayment deadlines, and the suspension of interest on some loans. The government has also announced a range of measures to support farmers who are struggling to make ends meet, including the provision of free counselling services and financial advice.
The dairy industry is a vital part of the Irish economy, accounting for over 7% of the country’s total exports. The industry is also a major employer, providing jobs for over 18,000 people. The industry has been hit hard by the COVID-19 pandemic, but the government and industry leaders are working together to support farmers and ensure the industry’s survival.
In conclusion, the reduction in milk prices by Lakeland Dairies is a reflection of the ongoing challenges facing the dairy industry due to the COVID-19 pandemic. While the industry is facing a period of uncertainty, the government and industry leaders are working together to support farmers and ensure the industry’s survival.