Dairygold cuts price for milk by 2c
It described the price reduction as “commercially unavoidable” considering the drop in returns from the market.
As the EU reductions in milk price support bite deeper on dairy incomes, Dairygold said it, too, has been forced to follow fellow processors, who earlier in the year announced milk price reductions, in response to falling market returns.
“The co-op’s objective is to process milk at the least possible cost and to value add through technical leadership and continued development of best routes to market so as to ensure sustainable returns to suppliers,” it said.
Dairygold chief executive Jerry Henchy said commodity dairy values are being managed by the EU milk management committee to take direct payments fully into account and to ensure that dairy product returns should not be greater than the intervention equivalent.
“This approach is incorrect and unacceptable and it is reducing farm incomes more than had been suggested while, at the same time, seriously undermining Europe’s capacity to hold its ground in world markets.”
Mr Henchy said the intervention price is supposed to be a “safety net”, not a target price, and cannot be accepted as the main determinant of dairy market prices and returns.
Dairygold, along with other processors and ICOS, has urged Agriculture Minister Mary Coughlan to aggressively challenge the commission’s policy. “Otherwise, for short-term cost-reduction, the EU is putting at risk important products such as casein, dairy product exports and cheese,” he added.
