Ornua PPI boost ‘the latest evidence’ of dairy price rises
Co-ops have been called on to “reflect on the significant dairy product price improvements” of the last six weeks, which allow them to “maximise the May milk price” to support farmers’ stressed cash flow.
Making the calls, Irish Farmers’ Association (IFA) president Tim Cullinan pointed to the Ornua Purchase Price Index (PPI) increase of 1.3 points to an equivalent of 29.9c/L including VAT yesterday, Thursday, June 4.
This, he said, is the latest evidence to suggest co-ops must maximise their May milk price.
“2020 is a difficult year for farmers. Co-ops must review their expectations for profit, and focus on digging deeper into their own cost structures to support their suppliers,” the president said.
The recent improvements in market returns will help them to take a more positive stance on milk prices.
IFA National Dairy Committee chairman Tom Phelan also commented on the matter, noting:
“Early signs of drought in northern Europe, and a poor start to the new season in New Zealand – as well as a gradual reopening of the global economy and food services trade – have contributed to a more positive market sentiment.
“In the last six weeks, we have seen spot prices increase by €532/t for butter, and €230/t for SMP [skim milk powder].
They breached €3,000/t and €2,000/t respectively two weeks ago. It is well known that spots are indicative of market trends, and therefore predict further improvements in average prices.
“It is clear that market trends are improving. Farmers now expect their co-ops to support them by tightening costs and maximising the price they will pay them for May milk,” Phelan concluded.