The Irish Farmers’ Association (IFA) has criticised the base milk price set by Lakeland Dairies for supplies during January.
Last Thursday (February 10, 2022) the board of the processor revealed that it was increasing its milk price in the Republic of Ireland by 1c/L to 41c/L.
That was inclusive of lactose bonus and VAT, for milk at 3.6% fat and 3.3% protein.
In a statement, the board noted that there is a “general stability at present in global dairy markets”.
Lakeland price
However, the IFA Dairy Committee Chair has stated that the price set by Lakeland “doesn’t reflect market trends”.
Stephen Arthur said that 41c/L was not good enough when the Ornua Purchase Price Index (PPI) “returned a farm gate price of 45.8c/L” last month.
“While milk processers lament that the cost of processing is on the rise, a five cent differential between the Ornua PPI and farm gate price simply cannot be justified.
“Processors cannot expect farmers to foot the price of increased processing, this needs to be returned from the marketplace. We need the 5c differential to cover our production costs,” Arthur commented.
“Seasonal bonuses cannot be used as smokescreens by processors to portray a rise in milk price, we need an increase in the actual base price and one cent won’t cut it,” the IFA Dairy chair stated.
Arthur’s comments come ahead of other processors setting their January milk prices; Glanbia’s board is set to meet tomorrow.
He said that although 41c/L “may look like a healthy price” farmers’ margins are being eroded by spiraling input costs.
“Agricultural input prices have increased by almost 17% over the past 12 months to the end of November 2021 according to the Central Statistics Office (CSO). This does not even factor in the recent additional increases in fertiliser, energy and feed prices that continue to rise on a weekly basis.
“Farmers need a milk price in the mid-forties in order to cover our cost of production which has soared in the past 12 months,” Arthur concluded.