There is still “room for improvement” on milk processor prices for suppliers, given an expected increase in demands for powders, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).
Ger Quain, the chairperson of the association’s Dairy Committee, acknowledged the announcement from Lakeland earlier today, Wednesday, March 11, that it was holding its base price.
However, Quain said that “there is still room for improvement, given the gap that already exists between the Ornua Purchase Price Index (PPI) and farmer price, even before the latest rise in the index”.
It is important to differentiate between current and likely short-term market uncertainty, and fundamental supply-demand data.
“We’ll be looking at prices being achieved by skimmed milk powder and whole milk powder, and watching for what we think will be an increased demand for them in line with that overall surge for food commodities with long shelf-life,” Quain continued.
“As consumer sentiment wants more control over what they eat in the current situation, we think we’ll see a steady increase in demand for powders and a rise in their price,” he added.
Concluding his remarks, the ICMSA dairy chairperson said: “We think that any kind of objective and cool look at the data, time-frames and likely consumer responses still support a steady upward trend in milk price.”
Lakeland
Lakeland Dairies has become the first processor to announce its milk price for February supplies.
Following a meeting of the board today, the cooperative has decided to hold its base price for last month’s milk.
In Northern Ireland, a base price of 25.25p/L will be paid for February – again the base price has been held.
Commenting on the price, the co-op said: “Overall, the global dairy markets continue to be extremely volatile, with consumption as well as transport and logistical networks severely affected as a result of the coronavirus fallout.
“Returns for most products are under pressure too. Lakeland Dairies will continue to monitor the market situation closely over the coming weeks,” the co-op added.