Irish dairy processors are being called on to pay “at least” 45c/L this month by the Irish Creamery Milk Suppliers’ Association (ICMSA).
The Irish Creamery Milk Suppliers’ Association (ICMSA) said today (Friday, March 4) that milk suppliers would be “looking at some standout points relating to the next round of price announcements”.
“The first thing we are looking at is that fact that the co-ops have seen fit to increase their processing costs by around 25%. That’s fine and we’re satisfied that the inflationary pressures being felt at co-op level can explain that,” ICMSA Dairy Committee chairperson Noel Murphy said.
“But, by exactly the same token, the co-ops will have to accept that their farmer-suppliers are experiencing their own inflationary pressures and our production costs are surging by at least the same level as co-op processing costs.
“So if they want to show us their adjusted costs, then we can show them our adjusted costs,” Murphy argued.
He continued: “Putting that together with the market data gives us our price and that’s why ICMSA is saying clearly that every co-op in Ireland should be paying at least 45c/L in their price announcements for February milk due to be made over the next week.”
According to Murphy, the ICMSA is “looking hard” at the gap between the Ornua Purchase Price Index (PPI) and the price that individual co-ops are paying to suppliers.
“The base PPI price increased by over 4c/L last month, but that only translated to an average 1c/L of a price from most co-ops.
“So there’s already about 3c/L of a gap between what the Ornua index is showing the co-ops received and what they paid to farmers,” the ICMSA dairy chair commented.
Murphy concluded: “We’ll be watching this very carefully this month and the co-ops had better be paying prices that close the gap.”