Co-ops Cannot Expect Farmers to Take All the Pain of Difficult Dairy Markets
IFA National Dairy Committee Chairman Tom Phelan said the Committee was currently preparing to engage with co-op board members ahead of the early May co-ops’ meetings to set the April milk price.
He urged co-ops to optimise the April milk price after the severe March cuts, to ensure that farmers are not being asked to take all the pain of challenged dairy markets.
He pointed out that, as the EU has announced an admittedly limited and insufficient APS scheme for butter, SMP and cheese, spot prices for SMP and butter have stabilised in the last two weeks.
“While dairy markets are being seriously challenged by COVID19 and the loss of demand from food services, it is clear that the doomsday predictions of some who said dairy prices would fall to intervention levels are not materialising,” Mr Phelan said.
“Furthermore, dairy markets cannot be the only consideration in deciding on milk prices: with crude oil prices down 75% since early January, fuel and energy costs have plummeted for processors. Co-ops have scope to cut costs beyond milk prices and cannot expect farmers to take all the pain,” he said.
“To support farmers’ cash flow during the spring months, in which farmers normally pay merchant credit and other bills, many owed to their own co-ops, board members must not forget the steep price cuts they applied in March, and work to optimise the April milk price,” he said.
Mr Phelan said the IFA National Dairy Committee would approach co-op board members from next week to discuss their co-ops’ milk prices.