The Irish Creamery Milk Suppliers’ Association (ICMSA) is forecasting that milk prices could reach around 45c/L for January supplies.
Speaking ahead of announcements by processors for base milk prices for last month, the ICMSA Dairy Committee chair noted that this prediction is against the backdrop of “rocketing” input costs.
“ICMSA will insist that imminent milk price announcements reflect the market and the returns the co-ops themselves are receiving. That’s going to mean a base price of around 45c/L,” Noel Murphy stated.
However, the Kerry-based dairy farmer warned against making any long-term conclusions as “there are so many unknowns and moving parts around the immediate future of the dairy sector”.
Murphy noted that there was a genuine fear that fertiliser and input costs would remain at current high levels while milk price receded as producers volumes rose.
“We have been around a long time and have seen the damage that can result when farm prices fall back and costs stay high – and it very rarely works any other way.
“This is what ICMSA means by ‘sustainable’. With environmental concerns driving the Dairy Vision Group – which is to report in a matter of weeks on the immediate structure of our sector – it is supremely important that dairy farmers have a viable economic footing for the years to come,” Murphy said.
“For the present, dairy markets are returning in excess of 45c/L and farmer price will need to get up to that level,” the ICMSA dairy chair concluded.
PPI
Meanwhile, Ornua has confirmed its Purchase Price Index (PPI) for the month of January, which shows an increase in value of more than 4c/L.
The PPI for January is 147.2, which equates to 45.8c/L including VAT, based on Ornua’s product purchase mix and assumed member processing costs of 7c/L, but excluding member margin.
The index is an increase from December’s figure of 135.5, which converted to 41.6c/L.
Ornua says that the increase in index is as a result of “continued stronger returns across the product range”.