The long awaited upturn in milk prices has finally arrived, with a board meeting at Connacht Gold yesterday agreeing to increase March milk price by 2.5 cent per gallon (0.55c/litre).
Given the dramatic improvements in market returns, Connacht Gold's increase is expected to be the first in a series of price rises by all processors.
It was also confirmed this week that there is no butter in intervention in Ireland for the first time since 1999.
The Irish Dairy Board last week announced further increases in returns. Butter is up a further €100/t and Skim milk powder by €158/t retrospectively from 5 March.
According to the IFA, the IDB combined SMP/butter index is now up a further 1.8c/l (9c/gal) to 32c/l. The total increase since July 2006 is now 6c/l (28c/gal).
IFA National Dairy Committee chairman Richard Kennedy said that milk price increases of up to 2.2c/l (10c/gal) are fully justified.
"Co-ops who are currently paying a base price of between 23.5 and 25.3c/l are getting totally unprecedented margins over the IDB SMP/Butter index of between 6.7 and 8.5c/l (30.5 and 38.6c/g),'' Richard Kennedy said.
Connacht Gold has also announced new quality bonus payments; milk with a total bacterial count (TBC) of less than 30,000 will qualify for 0.3c/l bonus, while deliveries with a somatic cell count (SCC) of less than 200,000 will earn a similar bonus.
For supplies that meet both criteria, March milk price could potentially increase by as much as 1.21c/litre (5.5c/gallon).
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