‘Everything pointing to October milk price rise’ – ICMSA

Milk processors are being called on to raise their prices this month for October milk, on the back of the current market indicators in the dairy sector.

The Irish Creamery Milk Suppliers’ Association (ICMSA) has argued that farmer milk price increases for October supplies “must be on the agenda for every co-op board”, and called for a “minimum” of 31c/L this month.

Gerald Quain, chairperson of the association’s Dairy Committee, said: “Dairy markets have moved on significantly since the mid-summer lull and the ICMSA has consistently argued over the last number of months that the current milk prices are demonstrably below where they should be.

We’ve no doubt – and the data supports us – in stating that some Irish processors cut their milk price a good deal more than was justified by market returns, and they will now have extra ground to make up in a situation where all co-ops should be paying in excess of 31c/L for October milk.

“Irish milk prices are now at the bottom of the European milk prices league, with our three largest milk purchasers represented consistently at the wrong end of Dutch Agriculture and Horticulture Organisation (LTO) European league and over €3/100kg below the average price,” Quain added.

He was referring to the European milk price comparison table operated by the LTO. Glanbia, Kerry and Dairygold are the three Irish processors whose prices are tracked on the table.

“Globally, we have seen Fonterra adjust their price upwards, and this was even before the latest rise of 3.7% in the Global Dairy Trade auction. Global milk prices have increased steadily while Irish prices have fallen or remained stagnant and this simply can’t continue,” the ICMSA dairy chairperson argued.

Quain also pointed to the milk quotes in the Netherlands, which, he said, stand at 32.89c/L for butter/skimmed milk powder mix, with whole milk powder at 35.1c/L.

Quain claimed that farmgate prices around have always kept step with Dutch milk quotes – apart from recently in Ireland.

“The upwards trend in the last two months across spot prices fully justifies price increases in the coming month and beyond… Markets have moved in a positive direction in the last two months and farmer-suppliers expect their co-op boards to deliver a milk price increase for October commensurate with those upward movements,” Quain argued.