Milk price increases are being “wiped out” by surges in input costs – but market indicators suggest a continued boost to milk price heading into peak season, the Irish Creamery Milk Suppliers’ Association (ICMSA) has claimed.
Speaking on the matter, ICMSA Dairy Committee chairperson Ger Quain said that the market fundamentals have “moved to an extent that warranted the price increases announced by some milk purchasers for January milk”.
However, he was adamant that these increases should continue going towards the peak production period beginning in May.
“Special attention” would focus on co-ops who had not increased farmer price for January, he added.
There is is real buoyancy in the milk markets at present and we are fully justified in expecting that to manifest itself in higher prices for dairy farmers.
Noting that a lift in January prices had been delivered by some milk purchasers, the chairman stressed:
“We are now stating bluntly and ‘on the record’ that all co-ops will have to increase milk price for supplies received in February.
“The Dutch dairy quotes have continued their upwards momentum, week on week, and we see the industry standard butter/SMP [skim milk powder] mix rising by an average 0.33c/L week on week and up almost 3.5c/L for the year to date.
“WMP [whole milk powder] is following a similar trend at slower pace, but still up 2c/L in the year to date.
This is being built off the back of eight consecutive increases in the GDT [Global Dairy Trade] that has generated this momentum and made proportionate increases in farmer price absolutely inevitable.
“The reality is that these increases have already been wiped out by the surge in input costs, but that only underlines how urgently we need those market-justified increases and they had better be forthcoming,” Quain concluded.