IFA National Dairy Committee Chairman Sean O’Leary has said that a quick look at the most up-to-date available indices of milk returns in Europe suggests that Irish milk prices have some catching up to do.
He said continued firming in butterfat prices may lead to some further uplift in the August Ornua PPI, and pointed out that August 2017 average EU MMO commodity returns – at just under 36c/l after deduction of 5c/l processing costs – also argued in favour of an Irish August milk price increase of at least 1c/l.
“Most of the indices (see graph below) are strongly supported by the historically high value of butterfat, with EU average butter prices on 3rd September coming in at €6390/t – a massive 155% increase compared to its lowest ebb of May 2016,” Mr O’Leary said.
“Strong butterfat value is also sustaining strong WMP and cheese prices, and all the indices have continued to strengthen despite the weaker SMP prices,” he said.
“I urge co-op board members, who will be meeting from this week to decide on their August milk price, to be sure to allow their fellow milk suppliers to fully benefit from the rising dairy returns, with a minimum of 1c/l price increase,” he concluded.