Co-ops Brexit Planning Cannot Focus on Milk Price Cuts  

Brexit Priorities

Speaking from the Virginia Dairy Show in Cavan today, IFA National Dairy Committee Chairman Tom Phelan said farmers felt let down that their co-ops’ Brexit preparation strategy seemed to rely pretty heavily on cutting and further talking down milk prices, using farmers’ hard work in terms of increased butterfat and protein content and extra volumes to ‘soften’ the blow.

“With the exception of the West Cork Co-ops, which exceeded it, all other co-ops have paid less than the Ornua Product Purchasing Index for the majority of the last 10 months.  In fact, those co-ops have even widened the gap into July, with the main purchasers cutting their milk prices to levels over 1c/l lower than the Ornua PPI would have returned for the month.  Here in Virginia, I want to acknowledge that Lakeland Dairies have come closest to the PPI over this period,” Mr Phelan said.

“While we recognise that butter market prices have eased, powder prices have picked up on EU markets and in the case of WMP at yesterday’s GDT auction.  Latest European average and spot quotes suggest returns for an Irish product mix equivalent to a milk price of around 31c/l incl VAT –1.5c/l more than some of the larger Irish co-ops are paying,” he said.

“Today, in Virginia, where we celebrate the excellence and sustainability of Irish dairy farming, I call on co-ops to communicate how they will at least hold milk price levels to year end.  This is essential to protect the farmer confidence which is such an important ingredient in the sustainability of the Irish dairy success, and co-ops must not undermine that confidence,” he concluded.

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