ICMSA claims co-ops holding back on milk price hike, keeping profits

CO-OPS are holding back on a 2c per litre milk price increase due to farmers and keeping the profits for themselves, argues the ICMSA.

It claims that improved global dairy markets should see the Irish price jump from 33c up to 35c per litre. It argues that co-op boards appear happy to agree on a lower milk price, with no intention of paying more irrespective of the strength of international markets.

ICMSA’s Dairy Committee chairman Pat McCormack said: “Two questions arise: why are the co-ops holding back on the price paid to their milk suppliers, and what are they doing with all the additional profits?

“Based on current analysis, markets are strong and have shown improvements since March. There has been a noticeable improvement in the last two weeks and, despite the increase in global milk supplies, the demand for dairy products has been strong, ensuring that dairy product prices remain at a high level.

“Based on current quotations and returns from the marketplace from a number of sources, we believe co-ops should be paying a price well in excess of 35cpl (VAT inclusive) which is at least 2cpl higher than the price they are currently paying.”

He noted that for a 230,000 litre dairy farmer (50,000 gallons approx) and based on the normal supply, this 2cpl would represent an additional €650 in income for May milk alone, or €4,600 on a full year’s milk production.

“Given the increased costs in 2011, and with many farmers still dealing with the fallout of 2009, the market improvements must be passed back to farmers. We can’t have the co-ops sitting on the increased prices they’re receiving and not passing them on to their own milk suppliers,” he said.