16 Oct 2014
EMERGENCY IFA DAIRY COMMITTEE MEETING ON MILK PRICEDairy
IFA National Dairy Committee Chairman Sean O’Leary said an emergency meeting on October 15 of the National Dairy Committee, attended by IFA President Eddie Downey and IFA Secretary General Pat Smith, reviewed IFA’s milk price policy in light of the severe cuts imposed by some co-ops, Glanbia and Kerry in particular.
He said while dairy markets were currently imbalanced and further weakened by the impact of the Russian ban, co-ops must not rely on farmers to carry the can. “They must come forward with strategies to give farmers options to lock in prices at sustainable levels and mitigate the impact of volatility on farm incomes. They must also join with us to build up the pressure on Minister for Agriculture Simon Coveney, who came back from this week’s EU Agriculture Council with nothing achieved on the necessary dairy support measures, and on our incoming Commissioner Phil Hogan.”
“Glanbia and Kerry have cut milk prices by 2.5c/l and 3c/l respectively, which is considerably more than September market returns would have warranted. Even allowing for the type of non-core resources Glanbia Co-op is putting forward to mitigate the hit on farmers, those cuts will cause a massive shock to farmers, as they reduce milk prices to levels too close to production costs for comfort in advance of next spring,” Mr O’Leary said.
“Other co-ops will be looking at their September price in coming days, and must be more judicious in their decision making. The Irish Dairy Board index for September was 110.2 points, equivalent to 33.9c/l incl. VAT, which is 3.4c/l more than the new Glanbia and 3.7c/l more than the new Kerry September price,” he said.
“The most frequently asked question at the Ploughing by dairy farmers was “where will prices be next Spring?” Co-ops simply cannot expect farmers, the last link in the chain with no opportunity to pass back costs and losses, to carry the full can of the current weak dairy markets,” he said.
“At our Dairy Conference next week, we will be calling publicly on co-ops and the Irish Dairy Board to urgently set out a plan to provide farmers with simple and readily accessible opportunities to lock in prices and margins on an ongoing basis. I ask dairy farmers to join our call and urge their own co-op board members to do better than just decide the price for last month’s milk,” he said.
“In the short term, it is also vital that additional market support measures be implemented by the EU Commission. The Minister came back empty handed from Brussels yesterday, and he must do better over the coming weeks. IFA has sought a meeting with incoming Commissioner Hogan, to demand, among other measures, the reopening of targeted export refunds and the revaluation of the safety net intervention prices to reflect production costs. Such decisive, meaningful measures can help turn around market sentiment quickly,” he concluded.