Claims of a 'two-tier milk price system' now at play

Claims of a 'two-tier milk price system' now at play

A two-tier milk price system is now at play, the Irish Creamery Milk Suppliers Association claimed today.

Dairy Committee chairperson Ger Quain said prices announced by processors for July show a discrepancy of over 3 cent per litre (cpl) between the top and bottom returns to farmers.

He said that KPMG figures put the difference at 4cpl, or astonishing €16,000 over the course of 2018 for supply of 400,000 litres.

Mr Quain said farmers are well aware of the international market uncertainty, but are entitled to ask why there are such shocking differences.

“If we look at 2019, this discrepancy is already at over €8,000 for the first seven months of the year for the same supply curve,” he said.

Meanwhile, Dairygold has followed Glanbia, Lakeland Dairies, Aurivo and Kerry in cutting its July milk price.

Based on standard constituents of 3.3% protein and 3.6% butterfat, inclusive of VAT and bonuses, Dairygold’s price is 29.69 cent per gallon (cpl), a reduction of 1cpl on the June milk price.

This equates to a farm gate milk price of 32.18cpl, based on average July milk solids for all Dairygold milk suppliers.

Dairygold said markets have been challenging, with butter returns falling significantly.

“More recently, cheddar cheese returns have been negatively impacted, primarily due to the uncertainty over Brexit. Regrettably, a downward milk price adjustment is necessary,” it stated.

Dairygold added that it will continue to monitor market developments.

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