Co-ops need to be very aware that farmer anger is growing in relation to what they firmly believe have been unjustified reductions in milk prices in recent months that simply represent Co-ops cushioning themselves at the expense of their members suppliers according to Mr. Gerald Quain, Chairperson of ICMSA’s Dairy Committee.
With information on milk markets from supply, demand and price available at the touch of a button, farmers have never been more up to date on the workings of the dairy market and they are very clear in saying that the milk price they are receiving is below what the market should be returning.
Prices from the Dutch Dairy quotes show that the average price has been above 32cpl since February and above 33cpl since the start of April and yet a number of Irish milk purchasers cut April milk price. The published milk price comparison from the European Commission puts the Irish April milk price at 32.7 euro/100kg placing us in a very poor 16th place and also compared to the EU-28 average of 34.52 euro per 100 kg. To put in context, if Irish farmers were receiving the EU average, a 300,000 litre milk supplier would receive an additional €5,500 in a full year which is hugely significant. We must also look at the 11 consecutive increases before the latest dip in the GDT and the fact that global milk supplies are actually falling. The Ornua April PPI increased to 31.6cpl which is a price well above what some processors are paying. All market indicators apart from concerns in relation to Brexit are positive and how cuts are inferred or derived from this current market is very hard to understand and are unjustified.
There is also, Mr. Quain said, a large price discrepancy between Irish milk purchasers. For a dairy farmer suppling 50,000 litres in the month of April, it is the equivalent of €1,400 difference from the top to the bottom. Co-op boards need to ensure that the milk price being paid to their suppliers is competitive and those near the bottom must immediately close what is an unacceptable gap, concluded Mr. Quain.