The 1c/L increase in September milk price confirmed by Glanbia and Lakeland is well short of what is actually available from commercial dairy markets, according to ICMSA Dairy Committee Chairman Gerald Quain.
He went on to accuse the processors of ‘yet again’ holding back on milk price improvements for farmers.
“The Ornua PPI now stands at 92.2 which is equivalent to 26.6c/L and that’s based on a 6.5c/L processing cost.
“This, in itself, is an excessive figure in our opinion and one which certain co-ops have confirmed as being below their processing costs.
“The PPI is based on returns from Ornua to member co-ops and, on this basis, a milk price of at least 27c/L is clearly and demonstrably justified.”
Quain said that if that wasn’t indicative enough, the spot market in the UK is now at 40 p/L, in the Netherlands it’s at 42c/L and in Italy at 39.2c/L.
“These are published figures and all dairy market indicators clearly show that markets continue to strengthen with global supply growth now at 1.4% below the growth level in demand.
“Against this background and in the context of the well-known and massive cash-flow pressures on farmers, giving farmer-suppliers a single cent rise is derisory and we’re calling on co-op boards to insist that their base price for September is at least 27c/L.
“I’ll repeat this because it bears repetition – this is the price that Ornua is returning to their co-ops and that is the price which processors need to be returning, in full, to their member-suppliers,” he said.
‘Co-ops must push ahead with October milk price increases’
Meanwhile, ICMSA Deputy President Pat McCormack said that the co-ops must push also ahead with significant price increases for October milk.
“The reality is that world dairy markets have strengthened significantly over the past number of weeks. And this trend must be reflected in the price paid for milk at farm level.”
McCormack admitted that dairy markets seem now to be on an upward trajectory, similar to the trends last witnessed in 2014.
“There is now every prospect that milk prices will remain strong throughout 2017. There is evidence that China is starting to get actively involved in world dairy markets again.
“Fundamentally, dairy farmers now need a period of sustained prices, so that they can pay back the debt they have built up, over the past year and more.”