Co-ops urged to explain gap between farm gate price and market

Co-ops will be asked individually to explain their milk pricing decisions, if they fail to raise their prices for November, by the Irish Creamery Milk Suppliers’ Association (ICMSA).

ICMSA Dairy Committee chairperson Ger Quain said that the co-ops would no longer be allowed retreat behind “no comment” against a background where the milk market has been buoyant for the last number of months without any corresponding rise in farm gate price.

Quain said that unless those notably higher prices are passed back for November milk supplied, the relevant co-ops will be asked individually to explain why they have “chosen to pocket” the improved prices and not pass them back to their farmer-suppliers.

Continuing, he said: “Prices have increased on the back of lower supplies across the European continent in all the major dairy products.

Dutch dairy quotes are showing a 5c/L increase in the industry standard butter / skim milk powder mix since September, while whole milk powder is up over 4c/L in that same time period.

“This must also be put in the context of the Ornua PPI which stands at 31.9c/L for November, continuing the trend that has it consistently higher than the prices paid to farmer-suppliers by their milk purchasers,” he added.

The chairman noted that the Ornua PPI has tracked the market trend over the course of 2019 where the milk purchasers have “significantly failed to do so”.

The chairman said his organisation has repeatedly requested milk purchasers to follow the market trend for the last number of months – “but it is now time for them to explain why they can’t – or won’t”.

“Given the sizeable differences between the market price, the Ornua PPI and the prices paid to the dairy farmers, it is only correct for milk purchasing co-ops to explain their decision not to raise milk price in clear defiance of the prices they themselves have received, as proved by the Ornua PPI climbing yet again,” Quain concluded.

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