Dairy farmers are “losing patience” with milk prices being offered by the country’s processors, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).
The ICMSA claimed that a global market improvement for dairy produce is not being reflected in the prices currently on offer for Irish milk suppliers.
Speaking today (Monday, November 27), Noel Murphy, the association’s dairy chairperson, welcomed the current bounce in milk markets across the world, but indicated that farmers were aggrieved that this bounce “fails to materialise in their farm gate prices”.
“2023 has seen significant falls in spot markets from the high of 2022 with resultant falls in farmgate prices of 20c/L or higher in the first half of the year. The falls in price some farmers experienced were in some cases higher than the total received as recently as 2016.
“When markets turned positive for the duration and to the degree we had seen recently, then farmgate prices simply have to follow,” he added.
According to Murphy, this did not happen with recently announced October milk prices.
“The Ornua PPI (Purchase Price Index) is running at 36.1c/L for October but there are many falling up to 3c/L short of that amount and that gap needs to be narrowed and eliminated in the coming months if farmers are to have confidence in their milk purchasers,” he commented.
“Since the lowest ebb of Dutch dairy quotes in late August, the industry standard, butter and skim milk powder mixes are up almost 10.5c/L and the whole powder returns have increased almost 8c/L.
“This is a three-month-long sustained increase unprecedented in 2023 and shows conclusively that there is increased confidence in the market,” Murphy said.
The ICMSA dairy chairperson added: “That confidence and level of trade must be reflected in higher prices to farmers supplying those co-ops.”
Murphy said that famer suppliers continue to see high costs of production, which are currently only in breakeven territory compared to prices received.
“That has to change and we know that the co-ops are getting better prices than their payments to their farmer suppliers would indicate.
“That has to change and has to change with their announcements for November milk,” Murphy added.
Dairy markets
The most recent Global Dairy Trade (GDT) index, reflecting the GDT auction of last Tuesday (November 21), was virtually unchanged compared to the preceding index figure two weeks prior.
The index after last week’s event was 986, only one point down from the prior event, not a significant enough of a change for the GDT to record a percentage change.
The latest GDT result follows on from a slight decrease two weeks ago, which itself followed four consecutive increases.