IFA National Dairy Committee Chairman Sean O’Leary today welcomed the announcement by Carbery that they would pay an end of year bonus of 1c/l on all 2017 milk supplies.
He said all dairy co-ops had an excellent trading year in 2017, and should have rebuilt their balance sheet to the point where they have sufficient comfort to follow the Carbery example.
“By our calculations, between July 2016 and October 2017, the average gap between the price paid by co-ops (average of the FJ League) and the returns from the EU market (based on EU MMO returns after 5c/l processing costs) was around 2c/l, varying between 0.2c/l in October 2017 and over 4c/l in September and October 2016. We estimate this retained value would have been worth over €190m to co-ops, bearing in mind the volume growth over the period,” Mr O’Leary said.
“It is obviously vital for farmers to benefit from the significant market improvements over that period, after a couple of very difficult years. Co-ops clearly supported milk prices in January to May 2016, by an average of just over 1c/l according to our study, and also needed to rebuild their balance sheets,” he said.
“The 1c/l 2017 bonus by Carbery must lead all co-ops to examine their ability to follow suit. All co-ops should now be in a comfortable position to commit to holding their current milk prices at least until spring, and to pay an end of year bonus on all supplies,” he concluded.