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.
- 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.