Dairy co-ops have 'scope to lift prices' - IFA

With co-ops set to reveal their milk prices for July supplies over the course of next week, the Irish Farmers’ Association (IFA) is arguing that there is scope to increase prices further.

“Co-ops have the opportunity to pass back more of the continued improving market value which has followed the end of lockdown and the increase in food services and international trade over the course of the last three to four months,” said Tom Phelan, the association’s Dairy Committee chairperson.

He argued that “at least some” of the co-ops have room to increase prices by 1c/L for July milk.

Acknowledging the sharp decline in the most recent Global Dairy Trade (GDT) index, Phelan argued that the 5.1% decrease “must be put into context”.

“[The GDT index] concerned almost only Oceanian product, much of which is as yet unproduced in the first month of the season, and takes place in the slowest month in the trading calendar,” he said.

The IFA dairy chairperson went on to say: “Meanwhile, European average butter prices rose €50/t during July, with powder prices relatively stable after a good recovery from their April and May lows.

“Spot quotes for butter have stabilised in recent weeks at €800/t above where they were in mid April, with SMP [skim milk powder] spots €250/t higher over the same period,” Phelan added.

International milk price comparisons also show that Irish milk purchasers perform below par.

Phelan cited the the LTO/ZuivelNL Monthly Milk Price Review of European processors, saying: “June 2020 shows the three participating (Irish) processors – Kerry, Dairygold and Glanbia – came in at €1/100kg (for Kerry) and €2/100kg (Dairygold and Glanbia) below the average for the main European processors.”