PPI should be minimum price for July milk – ICMSA

The Ornua Purchase Price Index (PPI) should be the minimum milk price set for July supplies, the Irish Creamery Milk Suppliers’ Association (ICMSA) has said.

The payment of the maximum possible milk price for July is absolutely essential, given the pressures on dairy farmers and the expected substantial reduction in farm incomes in 2018, the chairperson of the ICMSA’s Dairy Committee, Gerald Quain, said.

A lot of dairy farmers are currently faced with “massive feed and fertiliser bills” as a result of the adverse weather conditions experienced over the past year, he added.

“With most co-ops behind the June Ornua PPI – which was 32.8c/L – dairy farmers need the July milk price to be at a minimum of this level,” Quain said.

He acknowledged that dairy markets have been somewhat uncertain in recent weeks, given the recent drought conditions being experienced across Ireland, the EU and Australia.

There is a “strong reason” to believe that milk supplies will be severely hit by the drought conditions experienced across the EU; the ICMSA hopes that this may boost the market for dairy products.

Continuing, Quain said: “Cash flow is absolutely critical and the best way for co-ops to boost cash flow is to pay the maximum possible milk price.

“It is important to note that milk processors across the EU have increased their July milk prices, including Arla, Lactalis, Sodiaal and FrieslandCampina; this is a clear indicator that they have confidence in the marketplace.

“Given the circumstances Irish dairy farmers find themselves in, it is absolutely essential that our processors – at the very minimum – come to the Ornua milk price level, which was 32.8c/L for June,” he concluded.

It is expected that the Ornua PPI for the seventh month of this year will be confirmed in the coming days, while processors are also likely to begin announcing their respective July milk prices this week.