DAIRY farmers are demanding a price increase of 1 cent per litre to bring their returns in line with their European neighbours, according to the Irish Farmers Association (IFA).
While other European dairy farmers have price increases over the last few months, Irish prices have remained static, causing increasing disquiet among farmers. The increase being demanded by the IFA would see average co-op prices in Munster, for instance, rise to 30c plus VAT per litre.
IFA national dairy committee chairman, Kevin Kiersey, said: “Irish milk producers are the only European farmers to have received static prices since last May or June. All our fellow European dairy farmers have seen continued price increases over the summer months.
“All milk purchasers operate on the same market, and if European co-ops and private dairies have been able to increase their milk prices, there is no reason why, with markets as firm as they continue to be, Irish co-ops cannot do the very same.”
Returns for most commodities on EU markets are now almost back to May/June levels, after a poor July and August. There was a small 1.3% price correction after the September Fonterra auctions, but Irish farmers are still awaiting a lift from the rebounding commodity markets of recent weeks.
Butter and whole milk powder prices are now higher than last May/June, and while SMP prices have recovered more modestly, spot returns for most commodities or commodity combinations on EU markets are now at or above 35c/l before processing costs.
Cheddar cheese alone returns slightly less than SMP and butter, but when the relatively low-added value of whey powder is included, returns vary from 37 to 39c/l (based on spot quotes), mainly due to fluctuations in the Sterling exchange rate, Kiersey said.
The IFA expert added: “Industry uncertainty over the continuation of strong markets into the winter and next year were mainly based on expected huge increases in New Zealand milk production, but a poor start to the season leaves them at best on par with last year’s level.
“Not only are Irish dairy farmers still dealing with last year’s unpaid bills, they are now having to face significantly increased winter feeding costs.
“It is clear we are operating in a more volatile, and less predictable market. But this is not a good enough reason for Irish co-ops to deprive Irish farmers from fully justified price increases.”
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