With dairy markets having moved forward in August and indications that markets will firm further in September, the Irish Creamery Milk Suppliers’ Association (ICMSA) is calling for a base milk price of at least 48c/L.
Chairperson of ICMSA’s Dairy Committee has called on all milk processors to pay at least 48c/l base price for August milk.
Noel Murphy said: “They need to send a strong signal to their farmer-suppliers that the market improvements that have taken place over the last six weeks are noted and being fed-through to the price farmers receive.”
The chair said there is a “crisis of confidence” at farm level, and a “growing and well-justified belief” that everyone is doing very well out of the litre of milk except the farmer who is working to produce it seven days a week.
He said that it was incumbent on co-op boards to ensure that the farmer-supplier got the price that the market dictated and that meant 48c/L at least for milk supplied in August.
Milk price
Murphy said that debts and bills had mounted up all year and farmers needed that income to begin paying them down.
“We know that 48c/L is justified by analysing the markets – all have moved forward considerably from the EU to New Zealand to the USA with butter – a key product for Irish processors – moving forward very strongly,” Murphy stated.
“On the Dutch dairy quotations, butter has increased from €6,820/tonne on July 31 to €7,950 /t on September 4 representing nearly a 17% increase in the price of butter in just over a month, while WMP [whole milk powder] has increased from €3,860 to €4,280/t, an 11% increase and SMP [skim milk powder] from €2,330 to €2,530/t, a 9% increase over the same period.
“These are all easily verifiable rises, and they support clearly for case for 48c/L for August supplies. The GDT [Global Dairy Trade] has also moved forward over that period and so will the Ornua PPI [Purchase Price Index] in due course,” he said.
Murphy is reminding co-op boards that farmers can read market data just as easily as boards and farm organisations.
“We are adamant that a price of 48c/L for last month’s milk supplied is absolutely in line with the markets the co-ops are selling into and that is the price those co-ops must pay us farmers,” Murphy said.
Payment date commitments
Separately, with the Areas of Natural Constraint (ANC) payment due in farmer bank accounts on the week beginning September 16, the ICMSA has also called on the Minister for Agriculture, Food and Marine, Charlie McConalogue to ensure that his department delivers the maximum number of payments as scheduled given the “unrelenting cashflow pressures” on farmers this year.
Acknowledging the minister’s commitment to revert to 2022 payment dates after the delay in 2023, deputy president of ICMSA, Eamon Carroll said that the focus now needs to be on ensuring that all farmers are paid that week.
He said that while no-one doubted that problems may occur, the onus was “absolutely” on the department to notify farmers in time of those issues, with responsibility for addressing any problems then switching to the farmers and their advisors.
Based on the Farmers’ Charter commitment, the Department of Agriculture Food and the Marine (DAFM) undertook to notify all farmers of any problem by September 3, giving farmers about 15 days to respond to queries.
Carroll said that the minister should confirm that all queries have now been issued to farmers and he said it would be “very useful” if a reminder was issued to farmers and their advisors if they have not responded by Friday, September 13.
“We are entering a period where farmers traditionally pay their bills and it will be a real struggle for many given the very difficult and expensive last year,” Carroll stated.
“Getting your due payments on time is a big help and we call on the minister to ensure the maximum payment number in the third week of September as committed to in the Farmers’ Charter just recently concluded.
“In addition, the Charter Committee should meet shortly to address any potential difficulties with the ANC /BISS [Basic Income Support for Sustainability] /eco-schemes and also particular concerns at present in relation to TAMS and ACRES [Agri-Climate Rural Environment Scheme].”
The ICMSA deputy president concluded by stating that farmers have a legitimate expectation that payments will be delivered as per the Farmer’s Charter: “They plan on that basis and the system needs to recognise this, deliver the maximum number of payments and resolve problems quickly and efficiently,” he said.