Co-ops ‘cannot expect farmers to take all the pain’ in milk price

Ahead of the early May cooperatives’ meetings to set the April milk price, the Irish Farmers’ Association (IFA) Dairy Committee is currently preparing to engage with board members, the organisation has said.

Commenting on the matter, IFA National Dairy Committee chairman Tom Phelan urged co-ops to optimise the April milk price after the severe March cuts, to ensure that farmers are not being asked to take all the pain of challenged dairy markets.

He pointed out that, as the EU has announced “an admittedly limited and insufficient” Aids to Private Storage (APS) scheme for butter, skimmed milk powder (SMP) and cheese, spot prices for SMP and butter have stabilised in the last two weeks.

“While dairy markets are being seriously challenged by Covid-19 and the loss of demand from food services, it is clear that the doomsday predictions of some who said dairy prices would fall to intervention levels are not materialising,” Phelan said.

“Furthermore, dairy markets cannot be the only consideration in deciding on milk prices: With crude oil prices down 75% since early January, fuel and energy costs have plummeted for processors.

“Co-ops have scope to cut costs beyond milk prices and cannot expect farmers to take all the pain,” he said.

To support farmers’ cash-flow during the spring months, in which farmers normally pay merchant credit and other bills, many owed to their own co-ops, board members must not forget the steep price cuts they applied in March, and work to optimise the April milk price.

Phelan said the IFA National Dairy Committee would approach co-op board members from next week to discuss their co-ops’ milk prices.