All dairy co-ops have been encouraged to follow Carbery’s decision to pay an end-of-year bonus of 1c/L on all 2017 milk supplies.
Carbery’s announcement yesterday (Wednesday, December 20) was welcomed by the chairman of the Irish Farmers’ Association’s (IFA’s) National Dairy Committee, Sean O’Leary.
He is of the opinion that all dairy co-ops had an “excellent trading year” in 2017 and that they should have rebuilt their balance sheet to the point where they have sufficient comfort to follow the Carbery example.
Commenting on the matter, he said: “By our calculations – between July 2016 and October 2017 – the average gap between the price paid by co-ops and the returns from the EU market (based on EU Milk Market Observatory returns after 5c/l processing costs) was around 2c/L, varying between 0.2c/L in October 2017 and over 4c/L in September and October 2016.
We estimate this retained value would have been worth over €190 million to co-ops, bearing in mind the volume growth over the period.
“It is obviously vital for farmers to benefit from the significant market improvements over that period, after a couple of very difficult years.
“Co-ops clearly supported milk prices in January to May 2016, by an average of just over 1c/L, according to our study – and also needed to rebuild their balance sheets.
“The 1c/L 2017 bonus by Carbery must lead all co-ops to examine their ability to follow suit. All co-ops should now be in a comfortable position to commit to holding their current milk prices at least until spring, and to pay an end-of-year bonus on all supplies,” he concluded.
Processors across the country have been revealing their milk prices for November supplies in recent weeks, with all of the main players deciding to hold their prices for the eleventh month of the year.