IFA President Joe Healy has launched the Association’s autumn milk price increase campaign, challenging the co-ops to start rebuilding confidence by acknowledging the growing recovery in dairy markets and increasing milk prices.
Joe Healy said, “This is my strong message to co-ops boards and management ahead of an IFA series of meetings with co-ops over the coming weeks: the co-ops must accept that the dairy market recovery is a reality and start increasing milk prices. Dairy farmers are under extreme cash flow pressures after the prolonged market downturn and IFA will not tolerate any stalling on milk price increases”.
Joe Healy pointed out that EU commodity prices have increased strongly since May with butter up €590/t or 24%, SMP up 6.2%, WMP up 15.5%, Cheddar up 9.1% and Whey up 28%.
“The fact is that EU returns for the main commodities in the Irish product mix have now improved by almost 5c/l, according to the EU Commission’s Milk Market Observatory, giving a gross return of 29.85c/l before processing costs at the end of July. Assuming 5c/l for processing costs, this would allow for a farm gate price of 24.85c/l plus VAT or 26.1c/l including VAT. The latest GDT auction has confirmed this positive trend with prices up 6.6%”.
The IFA Dairy Chairman Sean O’Leary said, “Dairy farmers will be assessing their options for the autumn very carefully ahead of the September application deadline for the EU 14c/l milk supply reduction scheme, which was announced by Commissioner Hogan at the July Farm Council meeting”.
Sean O’Leary said, “It is now quite clear that the tide has turned on dairy markets and that we are looking at a recovery. With the dire cash flow shortage on farms and prices below the cost of production, farmers will need every extra cent from the market returned by co-ops to help pay bills and rebuild badly shaken confidence”.