The “price gap” of 1.5c/L between the top and bottom milk prices being paid by Irish milk processors “has to be bridged – and better be closed” by those at the bottom, according to the Irish Creamery Milk Suppliers Association (ICMSA).
ICMSA Dairy Committee chairman Ger Quain made the comments in advance of the next round of milk price announcements, which are expected over the coming days.
Commenting, the chairman said his organisation believes that there is scope for at least a 1c/L increase in base price from most co-ops.
He stressed there “must be more” from co-ops “who failed to increase price for May supplies”.
Quain cited the latest Ornua PPI – published this morning (Wednesday, July 7) – which shows an increase in the base index of over 1c/L.
“Let’s talk about what we know for a fact: there was already a price gap of 1.5c/L between top and bottom base milk that left really substantial differences in milk cheques between neighbours last month,” he said.
“That has to be bridged and it had better be closed by those at the bottom coming up. It cannot be the case that farmers in certain co-ops do not benefit fairly and proportionately from milk price increase.
“We see no reason whatsoever for any co-op to pay less than 36.5c/L base price for all June milk – and we’re supported in that by the Ornua price of 35.9c/L indicative price.”
The ICMSA dairy chairman added: “Returns from across the globe remain strong in what has been a solid year for dairy product demand with SMP [skim milk powder] price up over 20% year-on-year and butter increasing over 25% in the same timeframe.
“Farmers will not accept any repeat of the old discredited tactic of ‘low and slow’ price rises during peak production.
“They most certainly will not entertain excuses about events of four days ago when positive movements of four weeks ago have still not been fed through to their milk price,” Quain concluded.