The chairperson of the North and East Cork ICMSA has said that following the latest surge on international dairy markets, dairy farmers can expect a substantial rise in their milk price. Julian O’Keeffe said that August milk price must reflect the upward movements in all relevant indicators and markets.
Mr. O’Keeffe noted the following clear indicators of improved markets and increased farmer milk price increase:
– The increase of 7.7 percent in the latest Global Dairy Trade Auction (GDTA) which is the third in succession confirms that the long and deep price slump has turned and international dairy markets are quickly firming-up and regaining strength. When the Global Dairy Trade Auctions were last at the present level ( April 2012) Irish Co-ops were returning a milk price of between 28-31cpl to their farmer- suppliers.
– The Dutch dairy quotations are now returning 34.9cpl for the butter/SMP mix before processing costs are deducted and VAT added while the equivalent WMP price is 32.5cpl.
– The latest international comparison of milk prices for July shows Irish processors at the bottom of the league yet again. Indeed, the analysis shows that Fonterra is actually paying a better milk price than all three Irish processors listed. The Fonterra price is mainly based on commodities and Irish processors – who have a better product and market mix than Fonterra – simply have no excuse in this regard.
– Lactalis in France have agreed to pay an average of 27.5cpl for 2016 – effectively meaning that they will pay 29cpl for the remainder of the year.
Mr O’Keeffe said that it is also clear that the EU Voluntary Milk Reduction Scheme – which his association had been alone in advocating – has had an undeniable and immediate effect in raising prices and sentiments. “ We’ve been proved right in our analysis and the response we chose but there are massive cash flow pressures on farmers at present and yet farmers are still receiving a milk price below the cost of production even though markets have lifted very substantially. Co-op boards need to respond by lifting August milk price substantially to reflect the stronger markets”, he stated.
