Milk processors can and must pay more for August milk, the Irish Farmers’ Association (IFA) has said.

Calling on co-ops and processors to step up to the mark, IFA National Dairy Committee chairman Stephen Arthur pointed to reasons for a price boost.

“The latest PPI [Purchase Price Index] shows how strong the price is. While the market was hesitant over the summer, it has clearly moved on,” he said.

The August PPI of 118.1 and an Ornua Value Payment of €10.11 million equates to an IFA adjusted PPI of 38.71, including VAT, the chairman added.

“We are experiencing a sustained rally of milk price rises after a dip in commodity prices over the summer.

“Once again, we have seen butter and skim rise across the European spot markets and GDT [Global Dairy Trade],” he said.

Furthermore, Arthur highlighted that European spot prices are returning over €4,000/t for butter and over €2,500/t of skim milk powder (SMP).

“Last week, the EU futures market for September 2021-April 2022 returned €4,102 for butter and €2,614 for SMP,” he said.

“We need a milk price that reflects Ornua returns,” the IFA chairman concluded.

Meanwhile, the Irish Creamery Milk Suppliers’ Association (ICMSA) has said that some farmers were underpaid by €3,000 for this year’s peak milk production.

The chairperson of ICMSA’s Dairy Committee has said that a close analysis of the figures undertaken by the organisation points to what Ger Quain describes as “systematic underpayment” for the period of May through July.

Quain said that the ICMSA had looked at the figures for a farmer supplying 500,000L/year and compared the average weighted payments made by all the co-ops across that three-month period to the corresponding Ornua milk price plus added value.