Milk prices dropped by 1.16p/litre at United Dairy Farmers’ latest auction, to average 28.19p/litre – just 0.04p higher than the same time last year.
Although the auction only sold 40m litres, 2m less than last month, the fact that contracts started in February, which is a short month, meant daily averages were actually up, said chief executive David Dobbin. “Milk supplies are rising and this was the highest average daily volume sold since June last year.”
Prices were still well above recent Fonterra returns and average Irish milk prices, he added. “Following a period when United’s auction price has been running above international dairy market returns, it has now fallen back closer to the market.
“We understand that farmers, who are facing record feed bills at this time, will be disappointed. We gave a commitment to members that we would do everything we could to avoid a repeat of last year’s low peak milk prices. We intend to hold to that commitment. Farmers and processors both need more certainty and stability in milk prices and we are exploring ways to deliver that.”