Farmers were very disappointed to see a cut in their first big milk cheque of the year when markets would have justified stability, according to a farm lobby group.
The national dairy chairman of the Irish Farmers’ Association (IFA), Tom Phelan, expressed his disappointment saying: “The prices cut by co-ops have fallen below the Ornua Purchase Price Index (PPI) equivalent, at a time when eight consecutive GDT auctions, including this week’s, show global dairy price improvements.”
The chairman noted that the February milk payout was cut by between 0.5c/L and 1c/L by Glanbia, Kerry, Arrabawn and Dairygold so far, to price levels below the Ornua PPI, which is 32.2c/L including VAT.
“Those cuts are unfair to farmers who are still repaying bills from 2018.”
The dairy chairman stressed that this is value added to milk by the farmers’ efforts which ensures co-ops have “more butterfat and protein to process and export profitably”.
“If co-ops were coherent in this approach, they would also publish the higher price cut suffered by farmers at their actual constituent levels: A 1c/L price cut, measured at 3.3% protein and 3.6% butterfat, obviously equates to a higher price cut at higher constituents,” he said.
“We appreciate the uncertainty that Brexit in particular is creating for dairy markets; however, global indicators, including GDT, the Ornua PPI and the EU Milk Market Observatory (MMO) returns all suggest that Irish milk prices paid for January were sustainable for February milk.”
Concluding, Phelan called on co-ops to make it clear to their suppliers urgently what their plans are to return optimum and objectively-presented milk prices over the coming months.