Dairy Co-ops Must Heed Stable European Prices

IFA National Dairy Chairman Tom Phelan said Irish co-ops, which have been cutting milk prices in July to varying degrees and are busy talking them down further, were falling behind their European counterparts, many of which have held prices for some months, with plans to hold into September.

He added that the three Irish co-ops included in the Dutch LTO monthly review of European milk prices were 3.3c/l behind the average of the review for July milk, and it was high time Irish co-ops stabilised milk prices for the rest of the year.  “With the exception of the West Cork Co-ops, Irish milk purchasers have paid farmers less than the Ornua PPI return for most of the last 11 months, and they can afford to hold prices at least till year end,” Mr Phelan said.


“All European milk price indicators are showing stability.  The EU average milk price published for July by the EU Milk Market Observatory (MMO) based on member states’ reports is €33.7/100kgs, slightly above the June €33.5/100kgs price.  Between June 2018 and June 2019, the average milk price reported by the EU MMO has increased by 4%, yet the Irish price by only 1%,” he said.


“The Dutch LTO monthly review of European milk prices also shows that the three Irish co-ops it includes (Glanbia, Kerry and Dairygold) have fallen behind the average for some months.  For July milk, this gap has widened to 3.3c/l,” he said.


“The main European milk purchasers have stabilised milk prices for some months now, with Dutch-based cross-border co-op Friesland Campina paying €35/100kgs for Jul and August and continuing to hold for September.  Arla UK is also holding its milk price for September, the 8th consecutive month, at 30.22p/l, with most other British milk purchasers also holding, in many cases continuing a trend several months long.  Web-Agri France reports an actual 6% increase in the average milk price paid to French farmers for the third quarter of the year (July to September), to 34c/l,” he said.


“Irish co-ops are falling behind on milk prices, and it is simply unfair to Irish dairy farmers.  Brexit is a legitimate cause for concern, but Irish dairy farmers cannot be made to pay for it in advance.  Co-ops must send a clear signal to farmers that they will hold the milk price to year end,” he concluded.


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