The first meeting of 2020 for the Irish Farmers’ Association’s (IFA) National Dairy Committee has identified a 1c/L increase in milk price for January as “realistic and justified”.
According to Tom Phelan, the chairperson of the committee, all market indicators “suggest base price increases are fully justified, and co-op board members, especially in some co-ops paying early calving bonuses, must not lose sight of the importance to farmers of base milk price”.
“In a number of co-ops, long established or newly introduced unconditional early calving bonuses are paid in the early months of the year to encourage earlier production,” Phelan highlighted.
Those are about influencing farmer behavior, and are very much welcomed as they boost poor milk cheques at a time when volumes and solids are seasonally low and costs are high.
However, the IFA dairy chairperson argued that these bonuses “have nothing to do with market returns, and co-ops must not lose sight of the importance of base prices”.
Phelan continued: “We have demonstrated that the most relevant market indicators for dairy commodities relevant to the Irish product mix have risen substantially since last August.
“The January Ornua PPI, which returns a milk price of 33.5c/L including VAT, makes it clear that the December average milk price of 31.1c/L including VAT must be upped for January, with further increases necessary and justified before large volumes of milk start to flow.
Phelan concluded: “National Dairy Committee members will this month lobby their co-op board members to ensure they prioritise those badly needed, and fully justified price increases this month and before peak.”
Data source: IFA