I heartily commend the Irish Creamery Milk Suppliers’ Association (ICMSA) in developing its new milk price tracking system.
However, it only takes us part of the way when it comes to holding the dairy co-ops to account for, allegedly, underpaying suppliers.
What’s also required is an absolute commitment from ICMSA to publically ‘call out’ the individual co-ops, each time they are believed to have underpaid farmer suppliers.
Milk price tracking
Then the next question arises: Where do we go from there? Irish dairy farmers are very restricted in terms of moving from one milk buyer to another, should they ever wish to.
Would shaming a co-op into paying individual dairy farmers a better price actually work? As the old saying goes… ‘God loves a trier’.
There’s little doubt that we need greater transparency brought to bear in the way that Ireland’s dairy processers pay their primary producers. But the world and its auntie have been firing the same criticism at the beef industry since the year dot and nothing has changed within that sector.
Personally, I believe the co-ops are reasonably transparent in the way they go about their business.
Moreover, the likes of the Global Dairy Trade (GDT) event and the Ornua Purchase Price Index (PPI) already provide a pretty decent steer on the strength, or otherwise, of international milk markets and the role Irish dairy processers play in this context.
Pricing policies
Absolute red lines for me when it comes to dairy co-ops’ pricing policies would be payment ceilings on butterfat and protein percentages.
That I am aware of, this approach has been taken in certain parts of the world, where Jersey milk is concerned.
A degree of balance and reciprocity must also be brought to bear in the debates that take place between the processers and farm lobby groups, where milk price is concerned.
The reality is that the product mix generated by the various co-ops does vary from one processer to the next.
There are times when butter will deliver a better return than cheese or powder and vice versa.
These are critically important factors that must be brought into play when discussing the actual farm price paid by a processer.
ICMSA tracker
ICMSA should also be aware that it is very easy to introduce the likes of a dairy tracker system while milk markets are rising, the challenge is that of delivering the same service when prices take a nosedive.
To prove my point, I would point to the experience of the Ulster Farmers’ Union (UFU) in developing its Milk Price Indicator (MPI).
Launched in 2013, it had to be subsequently withdrawn for a number of months for teething problems to be ironed out.
Such are the travails of a farm lobby group!