A base price of at least 34c/L should be the target for all milk processors for February milk, the Irish Creamery Milk Suppliers’ Association (ICMSA) has claimed.
Speaking in advance of February milk price announcements by milk purchasers and co-ops, ICMSA Dairy Committee chairman Ger Quain said “now is the time to show confidence and intent” on the “notably improved market conditions”.
Quain also noted that the peak production period of late April to early June will now be positioned on a strong milk price.
Numerous indicators are showing that a milk price increase is fully justified from milk purchasers in the coming days.
The chairman pointed to the Ornua Purchase Price Index (PPI) which he said is at its highest level in 12 months and “has increased over 1.5c/L in 2021 alone – without even considering the value-added component of the index”.
“The significant increase in the GDT is simply following a trend where 11 out of the last 12 results have seen positive GDT returns since last September,” he added.
“The most recent double-digit surge was higher than expected – but it is by no means an outlier in terms of the trend or direction of milk price and reflects a similar trend for European milk products.”
The chairman noted that the latest Fonterra decision to increase milk price is also significant and sees its forecast increase by almost 9% since the start of 2021.
Dutch dairy quotes have followed the momentum coming from the southern hemisphere where the industry standard Butter/SMP combination is up almost 4c/L in the last 10 weeks, the WMP is up over 3c/L in that same timeframe.
“Dairy markets have moved on significantly since the start of 2021 and a base price of at least 34c/L should be the target for all milk processors for February milk,” he stressed.
“The latest data points unmistakeably to a strong price base for April-May-June peak production and we expect a significant step to be taken with February milk price,” Quain concluded.