Irish farm organisations have urged co-ops and milk processors to “hold their prices at the very least” for the month of May following a turn in the market in recent weeks.
Dairy representatives from both the Irish Creamery Milk Suppliers’ Association (ICMSA) and the Irish Farmers’ Association (IFA) have outlined reasons to avoid further cuts to milk prices.
ICMSA
Boosted by the poor weather conditions in Europe this spring, dairy markets are continuing to improve and should translate into positive returns to dairy farmers in the coming months, according to ICMSA Dairy chairman, Gerald Quain.
“We think the increased demand for skimmed milk powder (SMP) from Intervention and the lack of any negative impact on price is quite significant,” the chairman said.
We expect that the positive market sentiment will continue and we can’t see any reason why dairy farmers cannot receive better prices in the next number of months to make up for the very expensive spring period.
“The speculation that the European Commission is ready to move to two sales of SMP each month, shows the renewed interest and demand within the market for dairy products – resulting from spring peaks failing to hit expected production highs,” he added.
Quain said that Dutch dairy prices continued to improve last week with the butter/SMP mix returning 37.2c/L, after processing and including VAT.
“The next round of co-op price announcements need to signal a movement towards positive steps on milk price. The basis for reductions is completely gone at this stage,” Quain concluded.
IFA
IFA National Dairy chairman Tom Phelan said co-op boards must leverage the improved market returns of recent weeks to ensure, at the very minimum, that the full April payout – base price, plus support – is maintained for May milk supplies.
Phelan said: “Both Arla and Friesland Campina last week announced June milk price increases.
“Arla increased by 1c/kg, which translated into a 1.15p/L increase for UK supplier members; while Friesland Campina (FC) upped its ‘guaranteed’ price by 0.25c/kg.
“FC has stated that it expected European milk purchasers to increase prices further,” he added.
Market returns have been increasing steadily in the last few months, and now underpin solidly the prices currently being paid by Irish co-ops, with real scope for improvements.
“Dairy farms have only in the last month started to experience some relief from the dreadful fodder shortage and financial pressures following an eight-month winter.
“Co-ops must take the real opportunity afforded by improved markets to maintain their April payout for May milk, and then leverage the continuing improvements to return correspondingly improved milk prices,” Phelan stressed.