ICMSA warns against milk price ‘sleight of hand’

Co-ops are being called on to “assert their authority” on milk prices, following on from Dairy Industry Ireland’s (DII’s) announcement yesterday evening (Monday, February 9).

DII announced yesterday that, starting this month, dairy processors will be quoting prices in terms of 4.2% butterfat and 3.4% protein, along with the more familiar 3.6% butterfat / 3.3% protein basis.

Responding to this, the Irish Creamery Milk Suppliers Association (ICMSA) stressed that “no decision in relation to milk price reporting to farmers should be taken by an external body where co-ops are represented by management and not farmer board members”.

Co-op boards should have the final decision on this issue, not DII.

“How a co-op reports its price to the co-op suppliers is properly a matter for the board of that co-op. We also think that milk price announcements and changes should – and will – continue to be based on the 3.6%/3.3% metric and that will apply regardless of other metrics being introduced,” said Ger Quain, the ICMSA’s Dairy Committee chairperson.

He argued that “simply rebasing” milk price is “not transparency” and to suggest otherwise is “ridiculous”.

“If milk processors are serious about price transparency then they should publish data in relation to market returns on their product mix and stop hiding behind the ‘commercially sensitive’ excuse,” Quain remarked.

No-one objects to more information being provided, but context is everything and if the intention of using the new metric is to try and present Irish prices in a better light by some measurement ‘sleight of hand’, then it most certainly will not work.

The ICMSA dairy chairperson went on to argue: “If co-ops are going to publish data on a European solids standard alongside the Irish standard metric, then they should also, on a monthly basis, publish where their price is relative to the LTO EU average and where in the EU league their milk price stands.

“This would be real transparency and they could explain why the Irish price is consistently near the bottom of the league,” he added.

Quain argued that the improved solids in Irish milk came from “technical excellence inside the farmgate”.

“The base milk price has always been reported at the standard 3.3%, 3.6% basis and co-op boards should remember their authority and confirm that that will continue to be the basis going forward,” he concluded.