The Irish Creamery Milk Suppliers’ Association (ICMSA) Dairy chair is predicting base milk prices to break the historic 50c/L barrier for this year’s peak production months.
Speaking in advance of price announcements by processors for April supplies, Noel Murphy said that milk price has hit record levels each month this year due to the continuing surge in dairy markets.
“The wholesale market for milk continues to return prices in excess of 60c/L after processing costs despite the levelling of demand for products in the last number of weeks.
“Products sold during April have averaged over 63c/L for the butter/skim milk powder (SMP) mix and 62c/L for whole milk powder (WMP) in the Dutch dairy quotations.
“This includes an increased processing cost of 10c/L to cover increased inputs on the milk processing side,” Murphy outlined.
The ICMSA Dairy chair also pointed to the 13 point increase in the Ornua Purchasing Price Index (PPI) for April, which he said showed “the ongoing dramatic increase in the commodity basket of dairy products”.
Murphy acknowledged that inflationary input price pressures on the processing side are causing volatility in product returns. The Kerry-based dairy farmer noted that the same volatility is present at farm level.
However, he said that there was “absolute scope to increase the base price in excess of 50c/L for this month with room for another increase again for the peak production month of May”.
“Even with last week’s fall in the Global Dairy Trade (GDT) auctions, there is still higher prices feeding their way back such that we predict that farmer milk price for April and May supplies should be 50c/L base price,” Murphy said.