Co-ops urged to follow example set by Lakeland Dairies

Farmers’ organisations have welcomed Lakeland Dairies’ move to hold its base price and provide a continued support payment, and have urged other co-operatives to follow suit.

Both the Irish Farmers’ Association (IFA) and Irish Creamery Milk Suppliers’ Association (ICMSA) have commended the Lakeland board in their reaction to the announcement earlier today.

IFA

IFA National Dairy chairman Tom Phelan welcomed the decision by the Lakeland board, saying: “Earlier this week, we heard the Ornua PPI was stabilising for the first time since last October.

This showed that Irish co-ops had seen the worst of dairy returns and were now able to benefit from the firmer dairy prices being reported by the EU Milk Market Observatory.

“I would expect this helped Lakeland make this decision, and other co-ops must now do the same in recognition of the horrendously difficult late spring dairy farmers have endured,” Phelan said.

“The boards of other co-ops will be meeting from today to decide on the April milk price. They must not lose sight of the fact that it is only this month that farmers have started to see improved grass growth, while many could not keep cows outside day and night until a couple of weeks ago,” he said.

The dairy chairman said that milk cheques have suffered, not only from milk price cuts, but also from lower volumes and poorer constituents, while margins have been eaten into by higher feeding costs.

“Farmers will be legitimately expecting their co-ops to follow the Lakeland example in recognising those facts, and to sustain them and their milk supplies, that they will continue to support milk prices,” Phelan concluded.

ICMSA

Meanwhile, chairperson of ICMSA’s Dairy Committee Ger Quain has said that the co-op should be commended for their stance and acknowledged for this trend-setting milk price announcement that challenges other co-ops and processors to follow their lead.

Quain said that the earlier announcement by Ornua to keep its PPI constant has signalled a return of stability to the market.

The chairman said that farmer-suppliers will expect their co-ops to follow the lead set by Lakelands in their forthcoming price announcements.

“Everyone knows that the milk price achieved over next two months will go a long way to determining the overall performance of 2018 for dairy farmers,” Quain said.

“Equally everyone knows the hardships being endured at farm level with silage and concentrates costs likely to reach historical highs.

“The dairy markets have worked up some momentum in the last number of weeks and we’re particularly encouraged by the fact that Dutch dairy quotes for the butter/SMP (Skimmed Milk Powder) mix have increased over 6c/L in the last month with WMP (Whole Milk Powder) up 2c/L in the same timeframe.

“These indicators are very welcome but will take time to feed backwards to farmgate prices.

In the meantime, prices are still under pressure and ICMSA is calling on co-ops and processors to keep prices solid over the next two or three months.

“We repeat our conviction belief that it’s better for support to be shown through maintaining milk price than by support packages or other discretionary payments,” Quain said.