Milk price: IFA looking for an increase of at least 1cpl for May
A price increase of at least 1cpl for May milk was justified in most cases, especially for those co-ops which have been paying less than the Ornua PPI equivalent for the last few months, according to IFA national dairy chair Tom Phelan.
He was commenting just days before most co-ops decide on their May milk price.
“All indicators we have been monitoring for the last couple of months have returned more than the main Irish co-ops have been paying. The May Ornua PPI, which tracks the products and prices traded for the month in question, and is, therefore, very representative of Irish co-ops’ activity, at 30.45cpl + VAT, is only matched or bettered by the four West Cork co-ops. Since April, with co-ops cutting prices and the Ornua PPI increasing by 1.4 points, the gap between co-op payouts and the Ornua index has, in fact, widened,” Mr Phelan said.
He said that beyond the Ornua PPI, the EU MMO for early June would return an Irish milk price equivalent of 30.81cpl + VAT (32.47cpl incl VAT) after deduction of a notional processing cost of 5cpl. Average EU spot quotes for butter and SMP on June 5 would have returned a milk price equivalent of 32.02cpl + VAT (33.73cpl incl VAT) using the same processing cost.
“It is clear that Irish co-ops are being overly cautious, and are denying farmers the real current market returns, making them pay for potential impacts from Brexit which have yet to materialise. Meanwhile, markets are returning more than they are paying back to farmers. This is unfair, when this is the time dairy farmers generate the bulk of their income, and paying back last year’s massively increased bills is taking every available cent,” he said.
Mr Phelan said that there was clear scope for co-ops to increase the price they paid to farmers, in most cases by at least 1cpl for May milk.
"I urge co-op board members, when they sit down to decide in the next few days, to see to it that this is passed back to their fellow dairy farmers,” he said.