The Irish Creamery Milk Suppliers' Association (ICMSA) has criticised Dairygold's decision to cut its milk price to farmers by 3c/L for August milk supplies.

Yesterday (Tuesday, September 17), Dairygold confirmed that it would pay a quoted milk price of 45c/L, a reduction on the 48c/L offered for the previous month.

Commenting on this price announcement, the chairperson of the ICMSA's Dairy Committee, Noel Murphy, described the cut as "unjustified and unwarranted".

According to Murphy, the reaction to the price cut among dairy farmers has been "overwhelmingly negative".

He called on the board of Dairygold to reconsider its price for August milk.

Murphy said: "While dairy markets have weakened in recent weeks, August was a relatively stable month and the ICMSA's firm view is that milk price should be at least 47c/L for the month.

"A gap has now opened relative to other milk processors who have already set August milk price at a higher level," he added.

The ICMSA dairy chairperson said that the decision from Dairygold was "very disappointing and unreflective of the market reality for August milk".

"To put this in context, a 3c/L cut for August milk will cost a typical 500,000L supplier around €1,500 for that month alone and that is hugely significant. We'd urge the board to re-consider its position and deliver a milk price in line with other processors," Murphy said.

In announcing the August milk price, Dairygold chairperson Pat Clancy said: "There has been a dramatic deterioration in global dairy prices over the last three to four weeks.

"Increased global milk supply and weaker consumer sentiment have seen key Dairygold products, especially butter and cheese, fall by well over 3c/L," Clancy added.

"The speed, timing and extent of the market falls is challenging, as they emerge after the peak processing period, with seasonally higher stock levels exposed to these declining market returns," the Dairygold chair said.

He said that dairy market futures show "no immediate signs of recovery over the coming months".

According to the Dairygold chair, the priority for the processor is to "take decisive action and realign our milk price with market returns".