‘Growing sustainably’ must mean milk prices reflecting market returns – IFA

The Teagasc Moorepark ’19 Open Day theme of “growing sustainably” is extremely timely and relevant for the sector, according to the Irish Farmers’ Association (IFA).

Commenting ahead of the open day, IFA dairy chairman Tom Phelan said that while farmers would expect to hear about technologies improving their efficiencies, carbon footprint and general environmental performance – they would also expect to hear about their economic sustainability.

He noted that this cannot mean continued reliance on higher volumes and stronger constituents – all achieved through farmers’ hard work.

It must mean higher value added within the sector being passed back in strong, steady milk prices, and this must start right now, Phelan stressed, with at least 1c/L on June milk.

The chairman noted that few co-ops are even returning the average Ornua PPI equivalent of 32.09c/L including VAT for May milk at present.

“In fact, the gap between the poorer payers and the Ornua PPI has widened to a current level of just under 1.5c/L, as the price paid by co-ops fell and the PPI rose,” Phelan said.

“In addition, we have established that, by April, the three Irish co-ops tracked by the monthly LTO Milk Price Review – Dairygold, Glanbia and Kerry – have slipped down the list of European milk purchasers in the last 12 months and now pay €2.25/100kg, just under 2c/L at Irish standard constituents, less than the average of the LTO Review,” he added.

May and June milk last year represented 25% of national output, so that for a 500,000L producer, 1.5 to 2c/L would be worth between €1,875 and €2,500 of an income shortfall for those two months alone.

“Farmers are sick and tired to see their hard work on volume and milk solids hijacked by their co-ops to resist fully justified milk price increases.

“We know from the national Climate Action Plan that for dairy, growing sustainably cannot rely on volume – it must be about adding value – and this must mean returning as much of that value as possible back to farmers to help them fund the technology and practices they need to adopt to further improve their sustainability,” Phelan concluded.

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