The Irish Creamery Milk Suppliers’ Association (ICMSA) Dairy Committee chair has said that co-ops “can and should” pay 39c/L for milk supplied in December.
Noel Murphy said that there was “little doubt” that production last month was “particularly low” as farmers chose to dry off early in the face of “unacceptably slow price rises and stubbornly high inputs”.
The Kerry-based farmer said that ICMSA would never accept the argument that merited price rises did not matter for low volume periods like December.
He added that the operating principle of co-op must always be that they pay the highest milk price possible.
“There is no doubt that 39c/L is an absolutely realistic price for co-ops to reach for December payments and the markets for the last quarter of 2023 prove as much.
“Milk supplies are tight in exporting nations and if farmers are to be encouraged to produce long term, in the volumes that the co-ops already know they will require, then prices that reflect a rising global market and demand have to be paid to the primary producers,” Murphy said.
“Our feeling is that if the co-ops try to be ‘smart’ about this and shortchange the farmers now then they will come to profoundly regret this later in the year.
“It’s up to the co-ops to show their farmer-suppliers that they (the farmers) can produce on the basis that milk price is going to move up and past these stubbornly high inputs,” he added.
ICMSA
Murphy noted that the Global Dairy Trade (GDT) index is up over 20% since its lowest level, while European quotes for butter are up by almost a quarter in that timeframe.
He said that this translates into quotes on the European and Dutch auction returning equivalent farmgate prices of 42c/L for the different product mixes.
He added that ‘spot’ prices have been above the 40c/L mark since late October giving co-ops and milk purchasers “ample opportunity” to strike deals for their product.
“It’s up to the co-ops to recognise those signals and act on them.
“They have to be bold and begin restoring the farmer confidence that has been so badly shaken by 18 months of cruel margin-squeeze and really damaging ‘cave-in’ by the Irish Government to anti-dairy elements both here and in the EU.
“That needs to start this month and it needs to start by a decision to pay at least 39cpl for the milk supplied in December,” Murphy said.