Farmers under pressure from low milk and butter prices, says ICMSA

FARMERS are coming under increasing financial pressure by the artificially low price for milk and butter being imposed by the Irish Dairy Board (IDB).

The Irish Creamery and Milk Suppliers Association (ICMSA) is calling on the IDB to raise its milk prices in line with the prices being paid to farmers in the North, the Netherlands and elsewhere.

Dutch dairy farmers are being paid 35 cent per litre of milk, a 3.4c increase on the previous month.

The Northern Ireland milk auction also increased in April, with the price now over 30.1 cents per litre.

The IDB, meanwhile, is paying Irish co-ops just 27.4c per litre. Irish prices for butter are similarly lagging behind the competition.

ICMSA dairy committee chairman Pat McCormack said: “The Dairy Board had significant profits last year. We want them to pay up now, in line with other markets.

“The co-ops said they had an undersupply of 10%-20% for April, but the ball is in the IDB’s court. It is up to the Dairy Board to strike the ball in the right direction.

“If they want the milk, they have to pay for it. If they pay up, it will be better for everyone.”

The ICMSA cited Dutch quotations for butter, SMP and WMP which have increased by €230/t, €260/t and €240/t since the start of April. This represents an increase of 3.4c per litre for the butter/SMP combination and 3.1c per litre for WMP.

The Dutch market return is now nearly 35c per litre before processing costs and VAT for butter/SMP and for WMP. The ICMSA also cited recent New Zealand auctions, where under-supply of milk and butter also forced prices upward.

Mr McCormack added: “Along with the substantial increase in the last New Zealand auction, it is quite clear that dairy markets have taken a hugely positive step in the right direction following the improvement in March and dairy farmers are now expecting a significant increase in the Irish Dairy Board’s on-account price for April, which will be announced in early May.”

For April milk, Mr McCormack maintains that all co-ops, whether trading with the Irish Dairy Board or not, should be in a position to announce a significantly improved price. He said it is essential that dairy farmers be paid a strong milk price for their peak production months.

With profits of over €30m in 2009 – a year when most dairy farmers lost money – and with the prospect of improved markets gaining strength by the week, the Dairy Board is in a strong position and farmers expect they will deliver a significantly improved April milk price, said Mr McCormack.