Lakeland Dairies confirmed its August milk price on 10 September — a Northern Ireland base of 31.4p/litre, up 0.5p on July. If you supply Lakeland, multiply the 0.5p by your monthly litres to see what the rise is worth to your farm.
Within a day or two of a processor confirming the price, work out what it is worth in your own account that month, and whether your costs moved by more or less over the same period. A higher milk price only means higher profit if your costs rose by less.
What Lakeland confirmed
For milk supplied in Northern Ireland, Lakeland’s confirmed August base price is 31.4p/litre (for milk at standard constituents of 3.6% butterfat and 3.3% protein), inclusive of the Sustainability Incentive Payment, and up 0.5p/litre on July. For milk supplied across the border in the Republic of Ireland, the base price is 39.1c/litre including VAT, also inclusive of the Sustainability Incentive Payment, up 0.6c/litre on July — with an average payout across the month of 44.7c/litre. Lakeland was the first major processor to announce its price for the month.
A Lakeland spokesperson said the market “continued to improve throughout the month,” adding: “Global milk production remains high but the rate of growth is slowing. This will help to bring a better balance between supply and demand in the months ahead.” Separately, the Ornua Monthly Purchase Price Index for August came in at 130.4, up from 130.2 in July — but the indicative milk price return implied by that index, 36.2c/litre, was unchanged on July once Ornua’s estimated processing costs of roughly 10c/litre are stripped out.
Worked example: 0.5p a litre on a 100-cow herd
Put illustrative numbers on it. Take a 100-cow herd averaging 7,500 litres a cow a year — 750,000 litres in total, or roughly 62,500 litres a month if production were spread evenly across the year, which it never quite is, but it’s close enough to show the shape of the number.
| At July's base price | At August's base price | |
|---|---|---|
| NI base price | 30.9p/litre | 31.4p/litre |
| Monthly volume (illustrative) | 62,500 litres | 62,500 litres |
| Monthly base-price value | £19,312.50 | £19,625.00 |
| Extra this month | £312.50 | |
Sustained across a full year, that same 0.5p/litre is worth £3,750 on a herd producing 750,000 litres annually. Half the herd size and it’s £1,875. A 200-cow herd at the same yield and it’s £7,500. The calculation is your litres multiplied by the pence increase.
Milk price against cost per litre
Here is the part the announcement can’t tell you. Feed, fertiliser, diesel, contractor charges and borrowing costs don’t move on Lakeland’s monthly price schedule — they move on their own, on supplier invoices and interest rate reviews that land whenever they land. A farm that gained £312.50 in milk revenue this month but saw a feed contract or a fertiliser bill rise by £400 over the same period is £87.50 worse off, despite the price rise everyone is reading as good news.
The only way to know which of those happened on your own farm is to put cost per litre next to price per litre in a proper set of management accounts, updated monthly rather than reconstructed once a year at the accountant’s desk.
Lakeland's Republic of Ireland price
Lakeland Dairies processes milk from suppliers on both sides of the border, which is why it publishes two base prices in two currencies every month. For August, both moved the same way: NI up 0.5p/litre, Republic of Ireland up 0.6c/litre. Converting one into the other tells you less than it looks like it would — exchange rates move daily and the two prices are quoted including different VAT treatments — but the fact that a single cross-border co-operative raised both prices in the same announcement is a genuinely useful signal about the direction of the whole island’s dairy market.
Two things to do this week
Update your cashflow forecast with 31.4p/litre. If you’re working from a spreadsheet built in July, it’s carrying a price that’s already out of date. Ten minutes with the confirmed figures and your own litreage gets it current.
Put this month’s cost per litre next to this month’s price per litre before deciding the extra 0.5p is profit rather than just revenue. Our cashflow and budgeting work sets out that comparison every month.
What is still uncertain, and when we’ll know
Lakeland’s own statement describes an ongoing process: it will “continue to monitor the markets and endeavour to support our farmers with the best milk price possible in line with market conditions.” Nothing in August’s announcement commits Lakeland, or any other processor, to another rise in September. The Ornua PPI ticking up while its implied price return stayed flat is a reason for caution rather than confidence about where the next few months go. Lakeland confirmed August’s price on 10 September, and on that pattern the September figure is due around the second week of October, and that is the next real data point.
