Tipperary farming: milk price increase for June is 'over due'

IFA national dairy committee chairman Tom Phelan has pointed out that, as well as paying up to 1.5cpl less than the May Ornua PPI, and undershooting it for the last six months at least, Ireland’s main milk purchasing co-ops had underperformed massively in the Dutch LTO European milk league in the last 12 months.

LTO tracks the price paid by a selection of milk purchasers in the main EU dairy production countries. For Ireland, it tracks Dairygold, Kerry and Glanbia.

“It is clear that Irish co-ops have been doing a much poorer job at remunerating their suppliers than the European private and co-operative milk purchasers tracked each month by Dutch farm organisation LTO in their Milk Price Review. The main three Irish processors are currently paying €2.25 less per 100 kgs of milk than the average monthly price reported by LTO.  This is equivalent to just under 2c/l at 3.3% protein and 3.6% butterfat, and, the gap has widened dramatically in the last 12 months,” Mr Phelan said.

The chairman pointed out that in a couple of weeks’ time, co-op boards will start to consider their June milk prices. It is widely expected that volumes will have continued to grow significantly. Board members cannot depend on their fellow-farmers’ hard work to produce extra constituents and volumes and short-change them this month again on milk prices.

“At just under 29cpl + VAT, the main Irish co-ops currently pay up to 1.5cpl less than the May Ornua PPI of 30.45cpl + VAT (32.09cpl incl VAT). The gap has increased in the last two months as the PPI rose and co-ops cut prices. The Ornua PPI is most likely to at least hold into June. Farmers need that extra 1.5cpl to pay the massive bills they accumulated during 2018 – every bit of peak milk income must be available to deal with those debts, many of which are with the co-ops’ own agri supply divisions,” he said.