As milk supplies "look certain to fall", dairy farmers have called on co-ops to raise prices.

Speaking as July announcements of milk prices begin, Irish Creamery Milk Suppliers' Association (ICMSA) dairy chair Noel Murphy said it is "highly likely" that milk flows in Ireland this autumn will be "significantly reduced".

This is due to a number of factors, Murphy said.

He is urging co-ops to begin what he called a "manageable series of lifts in farmer milk price" that anticipates that tightening of supplies.

Double whammy

"It is no secret that farmers around the country are suffering the effects of the current drought and having little or no grass," Murphy said.

As a result, farmers are feeding "precious winter stocks" which is increasing costs while milk supplies from the cows are falling.  

"We are in that double whammy of feeding more and and getting less for it," Murphy explained. 

"That’s going to drop supplies, and we hope that’s going to push milk price up – as per the Lakeland price rise just announced."

Noting that the price being received for that reduced output is down substantially on last year, Murphy said that farmers were already looking at every cow in the parlour and doing minute calculations on individual costs and yields.

"The clear message to our co-ops is that if milk is to keep flowing this autumn, then milk price needs to improve," the dairy chair continued.

"There are tentative signs that spot prices are firming up more in the last month and we anticipate this continuing as the fall in supplies becomes more measurable and buyers come in to buy forward.

Murphy noted that the market for proteins is strong, and whole milk powder increased almost 3c/L in the the last week on the Dutch dairy quotes.

He added: "We need all the powers in our industry to chase that increased revenue as farmers are feeling the drought pinch at present and will feel it for months to come. 

"If milk processors are looking ahead and want those lower supplies of milk, then they better start paying for it."

Milk price

The Lakeland Dairies board was the first to announce its price for July.

The processor said it will pay a base price of 38.5c/L, based on constituents of 3.6% butterfat and 3.3% protein for July milk in the Republic of Ireland (ROI).

This price is inclusive of the 0.5c/l Sustainability Incentive Payment, Lakeland said.

The base price for July marks a 1c/L increase on the previous month.

In Northern Ireland, the processor confirmed a base price of 30.9p/L for milk supplied in July, also inclusive of the Sustainability Incentive Payment. This price is an increase of 0.8p/l on June.