The price paid to Irish farmers for June milk was over 2c/L behind the EU average, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).

Commenting on the matter, Gerald Quain, chairperson of ICMSA Dairy Committee, said that this continues the trend set over the last year where the gap has remained constant at 2c/L.

This, he said, has resulted in a standard Irish farmer producing 300,000L of milk annually, receiving €6,000 less than the EU average.

Quain noted that Friesland Campina, a significant exporter of dairy products, paid approximately 4c/L more than Irish processors for June milk and he called for co-op boards meeting to set their July milk price need to recognise their position in the EU milk league and set milk price accordingly.

“While the Ornua PPI index for July has declined somewhat, the market fundamentals remain strong.

“Global milk supplies for the first five months of the year are down 0.3%, while milk production is also down in Germany, France and the Netherlands – three key milk producing countries in the EU.”

The dairy chairman said that the market is currently in a positive position on the supply side, but added that there are “issues in relation to Brexit and other trade disputes that are causing problems”.

Quain said the ICMSA believes that co-ops have “held back on milk price” for the first six months of the year and that this will be seen in their end-of-year results for 2019.

In a situation where global supplies are tight, farmers expect that co-op boards will – at a minimum – hold milk price at its current level and those co-ops who are paying a milk price below the PPI, at this stage, must at least increase their milk price up to that level.

“In terms of our comparative position with our EU neighbours, there has been massive investment in processing and value added over the last number of years and serious questions need to be asked as to why we remain 2c/L behind the EU average; where is our value-added going to?

“As a start, the gap with the EU average needs to be closed,” Quain concluded.