Members of the National Dairy Committee of the Irish Farmers’ Association (IFA) will look to organise meetings with milk processors over the coming weeks after a “let-down” on milk price.
Tom Phelan, the association’s national dairy chairperson, said that milk suppliers were “angered” by the co-ops’ “continued lagging behind European milk price and dairy returns”.
“Irish farmers are being let down by their co-ops when market returns, as evidenced by the Ornua PPI [Purchase Price Index] and other European indicators, fully justified at least 2c/L above Irish milk prices,” Phelan argued.
The National Dairy Committee members will seek to organise meetings with their co-ops in the next couple of weeks to look for answers on the outlook for milk price for year-end and for spring 2020.
“Co-ops have used farmers’ good constituent performances to camouflage price cuts, and now hide behind the seasonally higher butterfat and protein levels to hold low milk prices,” he added.
He also highlighted that current prices may have a knock-on effect for milk suppliers in the new year.
“Milk prices this back end will condition farmers’ incomes next spring. Assuming no price changes from the October level, the constituent difference between October and March will be around 3.8c/L – that would be a cash-flow crippling €1,600 shortfall on the March milk cheque,” Phelan said.
There is no good reason for co-ops’ excessive caution on milk prices. The global supply/demand balance remains positive and powder prices continue to strengthen.
He continued: “EU indicators, including the Ornua PPI for October [31.5c/L including VAT], would all suggest prices of at least 2c/L above what the main payers have announced for the same month.
“Farmers are worried. Their cash flow this autumn is badly affected, as they try to clear merchant credit bills. Most of all, they are worried about next spring’s milk cheques,” Phelan observed.
He concluded his remarks by saying: “National Dairy Committee members, on behalf of dairy farmers, will be seeking answers from their co-op as to what they will do to justly reflect the market returns and improve the outlook for spring 2020.”