‘Underperforming’ Irish co-ops paying 1.5c/L less than PPI – IFA

Ireland’s main milk purchasing co-ops have underperformed massively in the Dutch LTO European milk league in the last 12 months – as well as paying up to 1.5c/L less than the Ornua Purchase Price Index (PPI) for May, according to the Irish Farmers’ Association (IFA).

IFA National Dairy Committee Chairman Tom Phelan added that cooperatives have been undershooting the PPI for the last six months at least.

LTO tracks the price paid by a selection of milk purchasers in the main EU dairy production countries, monitoring Irish processors Dairygold, Kerry and Glanbia.

Commenting on this, Phelan said: “It is clear that Irish co-ops have been doing a much poorer job at remunerating their suppliers than the European private and cooperative milk purchasers tracked each month by Dutch farm organisation LTO in its milk price review.”

The main three Irish processors are currently paying €2.25 less per 100kg of milk than the average monthly price reported by LTO, the chairman added.

This is equivalent to just under 2c/L at 3.3% protein and 3.6% butterfat – and the gap has widened dramatically in the last 12 months,” Phelan said.

“In a couple of weeks’ time, co-op boards will start to consider their June milk prices. It is widely expected that volumes will have continued to grow significantly. Board members cannot depend on their fellow-farmers’ hard work to produce extra constituents and volumes and short-change them this month again on milk prices,” he said.

The chairman added that, at 30.57c/L including VAT, the main Irish co-ops currently pay up to 1.5c/L less than the May Ornua PPI of 32.09c/L including VAT.

“The gap has increased in the last two months as the PPI rose and co-ops cut prices. The Ornua PPI is most likely to at least hold into June.

“Farmers need that extra 1.5c/L to pay the massive bills they accumulated during 2018 – every bit of peak milk income must be available to deal with those debts, many of which are with the co-ops’ own agri supply divisions,” he concluded.

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