Based on market returns, the absolute minimum acceptable November milk price is 30c/L, according to ICMSA Dairy Chairperson, Gerald Quain.
Quain made the comments yesterday following yesterday’s 3.5% increase in the Global Dairy Trade auction.
“Processors and co-ops must keep up with the market momentum and show leadership in the setting of up-to-date milk prices.
“The expectation now within dairy farming is that the 30c/L marker must be breached in the next round of price announcements.
“The 1c price rise last month was demonstrably short of the market realities and just did not reflect the obvious buoyancy in markets.
“This upward sentiment has been sustained over the month and, interestingly, whole milk powder has now taken over butter as the commodity in high demand.”
Dairy farmers are looking to 2017 with the expectation that prices will cover all costs of production dairy including their own labour for the first time in nearly two years.
Quain said that milk suppliers desperately needed money in the context of the unprecedented cash-flow pressure that all were subject to this autumn after what he described as “a truly disastrous year for dairy farmers”.
He also pointed out that the over 4,000 farmers who had entered the Voluntary Milk Supply Reduction Scheme will not get paid until late January at the earliest.
“ICMSA is specifically setting 30c/L as the absolute minimum that board members should be demanding from their co-op,” he said.
Fourth consecutive rise in prices at the Global Dairy Trade auction
At yesterday’s Global Dairy Trade, dairy product prices rose 3.5%. Prices increased on the back of the previous two auctions, where prices were up 4.5% and 11.4%.
All product prices were up except for butter milk powder (-2.6%). Lactose prices increased the most with a 10.6% jump in prices.
Whole milk powder (WMP) prices increased 4.9% and skimmed milk powder (SMP) prices (SMP) rose 1.4%.