Co-ops must acknowledge the growing recovery in global dairy markets by increasing their milk prices, said IFA president Joe Healy.
Launching the IFA’s autumn milk price increase campaign, Mr Healy said EU commodity prices have risen strongly since May, with butter up €590/t or 24%, SMP up 6.2%, WMP up 15.5%, cheddar up 9.1% and whey up 28%.
He says a price increase from dairy co-ops would help rebuild confidence in the sector.
“This is my strong message to co-ops boards and management ahead of an IFA series of meetings with Co-ops over the coming weeks,” said Mr Healy.
“The Co-ops must accept the dairy market recovery is a reality and start increasing milk prices. Dairy farmers are under extreme cash flow pressures after the prolonged market downturn and IFA will not tolerate any stalling on milk price increases.”
European Union market returns for the main commodities in the Irish product mix have now improved by almost 5c/l, according to the EU Commission’s milk market observatory, giving a gross return of 29.85c per litre before processing costs at the end of July.
Assuming 5c/l for processing costs, this would allow for a farm gate price of 24.85c/l plus Vat or 26.1c/l including Vat. The latest GDT auction has confirmed this positive trend with prices up 6.6%.
The IFA’s dairy chairman Sean O’Leary said: “Dairy farmers will be assessing their options for the autumn very carefully ahead of the September application deadline for the EU 14c/l milk supply reduction scheme, which was announced by Commissioner Hogan at the July Farm Council meeting.”
Mr O’Leary said that, faced with dire cash flow shortage on farms, and with prices below the cost of production, farmers will need every extra cent from the market returned by co-ops to help pay bills and rebuild badly shaken confidence.
© Irish Examiner Ltd. All rights reserved