CO-OPS MUST MAXIMISE THE MAY MILK PRICE

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CO-OPS MUST MAXIMISE THE MAY MILK PRICE
05 Jun 2020

CO-OPS MUST MAXIMISE THE MAY MILK PRICE

COVID-19, Dairy, Dairy Markets

IFA President Tim Cullinan called on co-ops to reflect on the significant dairy product price improvements of the last six weeks, which allow them to maximise the May milk price to support farmers’ stressed cash flow.

He said the Ornua PPI increase of 1.3 points to an equivalent of 29.9c/l including VAT is the latest evidence to suggest co-ops must maximise their May milk price.

 

“2020 is a difficult year for farmers.  Co-ops must review their expectations for profit, and focus on digging deeper into their own cost structures to support their suppliers. The recent improvements in market returns will help them to take a more positive stance on milk prices,” Mr Cullinan said.

 

IFA National Dairy Chairman Tom Phelan added: “Early signs of drought in Northern Europe, and a poor start to the new season in New Zealand as well as a gradual reopening of the global economy and food services trade have contributed to a more positive market sentiment.  In the last six weeks, we have seen spot prices increase by €532/t for butter, and €230/t for SMP.  They breached €3,000/t and €2,000/t respectively two weeks ago.  It is well known that spots are indicative of market trends, and therefore predict further improvements in average prices”.

 

“It is clear that market trends are improving.  Farmers now expect their co-ops to support them by tightening costs and maximising the price they will pay them for May milk,” he concluded.

 

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