The Deputy President of ICMSA, Pat McCormack, said this week that GIIL’s decision to hold milk price at 37.5 c/L for July milk is extremely disappointing and unconnected to the market realities of the Irish Dairy Board (IDB) Index.
McCormack, who also chairs the dairy committee, pointed out that another major milk processor – “and a PLC one, at that” – has been able to pay their similar sized suppliers prices for May, June and July milk that translated into €1,000 more than their GIIL counterpart.
He was also highly critical of the speed with which GIIL announced this disappointing price for July milk: “Farmers will wonder what the hurry was here and they may well suspect that this disappointing price announcement is designed to avoid having to take cognisance of the next round of market price rises expected to be announced in coming days.
“If the IDB Index is adjusted upwards in the next announcement – as is widely expected – then the GIIL decision will look even more questionable than it does now. It is especially disappointing to consider this attempt at holding back buoyant market returns in the light of the sentiments expressed when GIIL was set up about how ‘farmer-orientated’ the new venture was going to be. Dairy farmers will know that the best way of showing ‘farmer-orientation’ is to pay the best milk price that the market can bear and that is most assuredly not happening in this case where GIIL’s July price is a substantial 1.5c/L to 2c/L below where it should be during the key months of milk production,” said Mr McCormack
“The critical point for farmer directors sitting on boards to grasp is that the IDB Index is not some kind of vague guideline to what processors and Co-ops should be paying; it is a precise indication of the returns that the IDB is receiving and should be viewed as the minimum basis for setting out the milk price paid to farmers. The prices set out in the Index are not aspirations – they are what the Board is receiving and what the processors and Co-ops need to be passing back immediately to the milk suppliers.”