The cuts to milk price offerings announced this week have been described as “both cynical and in clear contradiction of readily available market data”.
Ger Quain, the Dairy Committee chairperson for the Irish Creamery and Milk Suppliers’ Association (ICMSA) expressed surprise at the cuts in Irish prices when contrasted against apparently stronger showings from around Europe.
“When we look past these price cuts, we see a situation where Dutch dairy quotes are up 1c/L since mid-August. The standard industry butter and skim mix is above 30c/L – that’s up 1c/L – since the middle of August, while the WMP [whole milk powder] price equivalent is at 32.6c/L – again, up 1c/L – since the same mid-August point,” said Quain.
The usual market indicators are all up and global milk price is at its lowest growth rate since the EU abolished milk quotas. How, in the name of God, do you cut base milk price to 28c/L against that background?
Quain was referring specifically to Glanbia’s decision to reduce its price to 28.5c/L, including VAT. Glanbia Ireland (GI) decided to pay a base milk price for August of 28c/L including VAT.
“If these co-ops can cut milk price when wholesale prices are rising and supply is falling then I’d hate to see what they’d do when markets are falling and supply is rising,” said Quain.
We estimate that the 1c/L price cut for a standard 400,000L supplier will have cost him or her €425 on their August milk cheque. That mightn’t seem like a lot of money to the executives involved but it’s a lot of money to the farmers whose milk is keeping the whole dairy sector going.
“To give some idea of where we are now, I’d just point out that when I started milking for myself in 1982 I was receiving the equivalent of 28c/L, and to see a company, Glanbia, paying that now as a base price 37-odd years later is nothing short of shocking,” claimed Quain.