‘Growing anger’ with farmers expecting ‘at least 30c/L’ for June milk

Dairy markets have again moved forward during June with all the statistics pointing to improved returns – and, on that basis, all co-ops should be at least paying 30c/L for milk supplied in June, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).

ICMSA Dairy Committee chairman Ger Quain said there is growing anger amongst farmers supplying into the lower paying milk processors regarding the price they are receiving for their milk – which “is demonstrably behind market returns”.

Quain said that it is up to board members of these processors to insist that milk price is immediately brought into line with market returns, adding:

Given the importance of June milk to the overall financial position of the dairy farmer by year’s end, the milk price paid by all processors must come up to 30c/L minimum for milk supplied in the month.

“Farmers are clearly saying that they want their milk price paid in full now and not as retrospective bonuses later in the year,” the chairman added.

Quain warned that the ICMSA does not accept milk processors “using milk suppliers as a risk management tool by holding milk price at peak and paying bonuses later”.

Continuing, he highlighted that the Ornua Purchase Price Index (PPI) for May milk equated to 29.88c/L and markets have moved forward again during June, with the expectation being that returns will improve further during July.

“Everyone accepts that there has been extreme volatility on milk markets since the Covid-19 enforced lockdown. But thankfully, markets did not decline as much as anticipated, and markets have rebounded quicker than expected,” he added.

Current Dutch dairy quotes for butter/SMP [skim milk powder] are 29.29c/L, up from their low of 22.8c/L in mid-April and WMP [whole milk powder] stands at 30.14c/L, up from 28.34c/L in the same time-frame.

Highlighting that the Global Dairy Trade Index has also seen three consecutive rises in recent weeks, Quain added: “The index stands at 919 basis points, up from a low of 893 in early May.

“Overwhelming evidence all indicates that the minimum milk price for June milk must be 30c/L and it is up to the boards of all milk processors to insist that this is delivered by management,” the chairman concluded.