A “low and slow” feel to the actions of some milk processors is making supplier farmers suspicious, according to the Irish Creamery Milk Suppliers Association (ICMSA).
Commenting, ICMSA Dairy Committee chairman Ger Quain said that the association’s analysis of current dairy prices indicates a price of 36c/L.
From this, Quain said he expects that to be the price announced for May supplies, when the processors decide over the next few days.
Quain said that close study of current market conditions and trends showed that most milk purchasers and co-ops had “held back slightly” on April milk price for their supplier-members.
“Some of the processors did increase price for April supplies. But some – inexplicably – did not,” he said.
That means that that price rise is already overdue and will have to be passed back in the announcement for May supplies about to be made.
“The Ornua PPI is 34.15c/L excluding added value of over 2c/L, meaning that there is a larger difference being left between what the processors got and what they passed on.
“We expect that to be closed in the upcoming round of price announcements,” said Quain.
“There’s a ‘low and slow’ feel to some of this that’s making milk suppliers suspicious. We’re seeing the second ‘bounce’ of 2021 dairy markets when some farmers have still not got the benefits of the first ‘bounce’.
“The most recent milk market developments have seen all products increase with the industry standard butter/SMP [skim milk powder] mix rising by the equivalent of 1.5c/L in the last three weeks.
“WMP [whole milk powder] increased by a cent per litre in the same timeframe, according to Dutch dairy quotations.
“These increases need to be translated into farm price in the price announcement due over the next week, otherwise farmers will suspect that the prices is being held back ’till we’re past peak production and farmer milk volumes fall,” the chairman concluded.