ICMSA calls on processors to hold milk prices
Despite some negative talk regarding dairy markets, a very clear message needs to be sent out that dairy markets remain in a very strong place, according to Pat McCormack, Deputy President and Chairperson of ICMSA’s Dairy Committee. He also said milk processors should have accumulated hefty reserves over the past 12 months through not passing back the full returns as the market went up.
“Quite clearly, this leaves milk processors in a very strong position should dairy markets weaken,” he said. While markets have softened, Mr McCormack said that ICMSA is sure of the underlying strengths of the market by reference to the following published statistics:
– The Dutch dairy quotations for butter/SMP and WMP are 41c/L and 44.6c/L respectively.
– The Irish Dairy Board Price index for March is at 131.45, which is higher than the index in October 2013 when the co-ops were paying the current price for milk.
– In the UK market, published prices indicate that butter/SMP is returning 43c/L.
– In EU markets, the marketplace is returning 45.8c/L for butter/SMP.
“It’s very evident that dairy markets are still in a healthy position and dairy farmers can expect strong prices for their milk in the coming months. At the peak of the dairy product prices, statistics clearly show that processors did not pass back in full the strength of the dairy market. In addition we know that a number of processors did not return the VAT rebate increase to farmers, so – given that markets are still in a healthy place and with this cushion in place – dairy farmers fully expect their milk processors to pay a strong milk price in the coming months,” he said.