Co-ops told to ‘stop dragging heels on price’ when ‘facts favour rise’

Irish dairy cooperatives cannot keep dragging their heels on milk price when all indicators point to higher prices, according to the Irish Farmers’ Association (IFA).

Commenting following the news of a third consecutive increase to the Ornua Purchase Price Index (PPI), IFA National Dairy Committee chairman Tom Phelan highlighted the indicators in favour of a price boost.

Speaking yesterday, Thursday, December 5, the chairman listed:
  • Ornua’s PPI for November has risen by one point to 106.6 points – or 31.9c/L including VAT;
  • Fonterra has increased its 2019/20 payout to a mid-range point of NZ$7.30/kg MS – equivalent to 31.23c/L including VAT at Irish standard solids;
  • Global Dairy Trade (GDT) skim milk powder (SMP) prices have reached their highest level in five years at US$3068/t, and whole milk powder (WMP) the highest in three years at US$3,331/t;
  • Friesland Campina has lifted its December price by €0.91/100kg to €36.41/100kg – worth 32.62c/L including VAT at Irish standard solids;
  • EU average SMP prices have lifted to €2,500/t for the first time since August 2014;
  • EU average butter prices have risen €30/t to €3,660/t in the last week;
  • EU average raw milk prices have increased 4.5% since July.

“All these facts point to steadily improving returns from the market place – justifying better farm gate milk prices, because there is a good balance between slower milk supply with low stocks, and solid demand growth,” Phelan said.

“There can be no justification for Irish co-ops not to move on the November milk price – when the lowest payers are nearly 3c/L below the Ornua PPI,” he said.

“This month, our message to co-op board members is clear: Stop dragging your heels on milk prices, and pay farmers the extra 1 to 2c/L on November milk that their cash flow is crying out for,” the dairy chairman concluded.