The latest Ornua Purchase Price Index (PPI), although reduced for the month of July, “still leaves room” for co-ops to hold their prices for July milk prices “at the very worst”, according to the Irish Farmers’ Association (IFA).
“Apart from the west Cork co-ops, all milk purchasing co-ops have undershot the Ornua PPI in the milk price they have returned to farmers for most of the last eight months,” said Tom Phelan, the IFA’s national dairy chairperson.
Phelan pointed out that, despite the fact that the Irish milk supply is up 10%, global supplies for the first half of the year are down.
Germany (down 1.5% in May and 1.4% in June), France (down 1.6% in May and 0.2% in June) and Dutch milk output, still moderated by herd reduction, is down 2.7% for the January to May period.
Phelan explained that heatwaves in June and July are “compounding these figures”.
He also pointed out that “demand remains relatively good in Asia, South America, the EU and the US”.
“Concerns over the potential impact of economic and geopolitical factors that have yet to materialise are not good enough reasons to deny Irish farmers, for several months, a milk price fully justified by market returns,” Phelan argued.
He concluded by saying: “Co-ops will be meeting to set milk prices from next week and they should be able, at the very minimum, to hold prices at their current levels.”
The adjustment for July reflects sharply weaker butter prices, partially off-set by improved powder prices and flat returns for cheese, according to a spokesperson for Ornua.