Milk price model not working for farmers

The current milk pricing model is not working for young farmers, says Macra na Feirme.

The organisation questioned the current milk pricing model, and payments of milk top-ups based on litres only instead of the kilogrammes of solid milk supplied, at the recent dairy forum chaired by Agriculture Minister Michael Creed and attended by stakeholders from across the entire industry.

National president Seán Finan said: “The pricing model should be based on a monthly or quarterly forward pricing system which would enable farmers to budget more accurately.

“Such systems are common place across other dairy producing countries and facilitate farmers to manage price volatility.”

Mr Finan also encouraged the forum to focus on the structural and strategic issues affecting the industry saying: “It is imperative that together we position the industry to better cope with any future shocks or downturns in the marketplace.”

Young dairy farmer Kieran McDermott, a member of the Macra na Feirme Agricultural Affairs Committee told the forum: “A major issue is the payment of milk top-ups based on litres only instead of on kilogrammes of the milk solids supplied.

“This has a significant impact on farmers especially at this time of the year when milk solids are high.

“Efficient farmers could benefit more from a payment system on kilogrammes of milk solid, especially in a year where ever cent counts on dairy farms.”

Ornua’s presentation on the global market outlook for 2017 predicted an estimate of 30-33c per litre.

“We need to gain clarity as to the European plan regarding the release of skim milk power (SMP) held in intervention.

“Any release of SMP onto the market must be effectively managed so as not to disrupt the improving market price” said Mr Finan.

Macra was represented by Mr Finan, CEO Denis Duggan, and agricultural policy manager, Derrie Dillon, at the forum.


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