For milk supplied in the Republic of Ireland, the processor will offer a price of 35.5 cents per litre, reflecting a reduction of 1.85 cents per litre compared to the June price. In Northern Ireland, a base price of 28.5 pence per litre will be paid for July milk, marking a decrease of 1.5 pence per litre from June.
Lakeland Dairies attributes the price cut to subdued global demand for dairy products, which remains persistently low. The resilient supply of milk in major production areas adds to this challenge, causing a persistent mismatch between supply and demand dynamics. This issue is compounded by the weakened economic conditions in various parts of the world, notably China and Asia.
This announcement comes on the heels of New Zealand’s Fonterra, the world’s largest dairy exporter, revising its forecast payment to farmers following a decrease in demand from Chinese buyers. Fonterra’s lowered forecast indicates the intricate interplay of international market factors that influence the dairy industry on a global scale.
The medium to long-term outlook for the dairy industry appears promising, particularly for New Zealand dairy, which is expected to benefit from steady milk production levels in key exporting regions. However, these recent developments underscore the volatility and sensitivity of the dairy market to factors like demand fluctuations and localized production surpluses. As the industry navigates these challenges, a comprehensive understanding of global market dynamics remains crucial for stakeholders to make informed decisions.
