Farmers Need a Level Playing Field on Milk Price

As co-op boards gather to determine the base price for September milk, IFA Dairy Chairman Tom Phelan has urged all milk processors to return a fair price to its suppliers, especially those that offered below average prices last month.

The Ornua PPI has risen for September to 102.8. When the Ornua Value Payment (which includes the value from premium, non-commodity products and the montly trading bonus, paid monthly on a pro-rata basis to all member co-ops) is considered, the IFA adjusted PPI estimates a return of 32.1c/L – a significant gain on last month.


The average price for August was 31.4c. However, there is a 1.5c-2c/l difference in base price offered by the highest paying milk processor and the lowest paying milk processor.


Despite COVID-19 restrictions, exports of dairy products have increased by 6% (5% in volume) up to the end of July (latest CSO figures) and already exceed €3bn. Significant gains of approximately 5c/L on the commodity market since its lowest point in May demonstrates the robustness of the trade,” he said. This is reinforced this week’s GDT auction where overall trade (+2.2%) and particularly butter (+8.4%) drew healthy demand.


Forecasts also remain steady into Q1, 2021 underpinned by holiday season demand. Futures market indications forecast prices for February 2021 of €3,261 for butter and €2,228 – similar to recent spot quotations.


“There is scope for at least a 1c/L milk price rise, particularly from milk processors that have been paying below average milk prices. Farmers deserve a level playing field when it comes to milk price,” he concluded.


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