Milk prices must hold for April, May and June – ICMSA

ICMSA Vice President Pat McCormack has told Agriland that the co-ops must keep producer milk prices for April, May and June at current levels.

“I am aware that prices paid at the Fonterra auction have weakened over recent weeks,” he said, “but, the real barometer of the milk prices paid in Ireland is the monthly Dairy Board Index. It is the true gauge of the prices that processers in this country can afford to pay for milk.

“And yes I know that it dropped form 133.5 in March to 131.6 in April. However, when the index started to rise last year, it took three months for dairy farmers to feel the benefit of this trend in their milk cheques. So the same principle should work in reverse, which is why I expect the co-ops to hold prices for April, May and June, at the very least.”

The ICMSA representative confirmed that commodity butter prices have a major bearing on the farmgate prices paid in Ireland. “It may be significant that prices paid for butter at the Fonterra have started to weaken,” he commented.

“And we will be keeping a very close eye on the next set of figures to be issued by the Dairy Board at the beginning of May.”

Reflecting on this week’s upturn in the weather Pat McCormack pointed out that cows are performing tremendously well at grass. “Daily milk yields are up almost 20% on this time last year,” he said.

“At one level this is excellent news for farmers. However, producers should also keep at least one eye on their quota allocation for this year.  The last thing the dairy industry needs as it enters the post quota era is the dead weight of a large super levy bill.

“Obviously, we will continue to lobby Simon Coveney on this matter, in the hope that he can get some change out of the EU Commission regarding a possible soft landing for the quota regime.  But it would be wrong to give dairy farmers the impression that this is a done deal. To date the Commission has shown no sign that it will change its policy on this issue.”