Milk Price Increase Overdue for June

FA National Dairy Committee Chairman Tom Phelan today pointed out that, as well as paying up to 1.5c/l less than the May Ornua PPI, and undershooting it for the last 6 months at least, Ireland’s main milk purchasing co-ops had underperformed massively in the Dutch LTO European milk league in the last 12 months.  LTO tracks the price paid by a selection of milk purchasers in the main EU dairy production countries.  For Ireland, it tracks Dairygold, Kerry and Glanbia.

“It is clear that Irish co-ops have been doing a much poorer job at remunerating their suppliers than the European private and co-operative milk purchasers tracked each month by Dutch farm organisation LTO in their Milk Price Review. The main 3 Irish processors are currently paying €2.25 less per 100 kgs of milk than the average monthly price reported by LTO.  This is equivalent to just under 2c/l at 3.3% protein and 3.6% butterfat, and as the graph overleaf shows, the gap has widened dramatically in the last 12 months,” Mr Phelan said.

“In a couple of weeks’ time, co-op boards will start to consider their June milk prices.  It is widely expected that volumes will have continued to grow significantly.  Board members cannot depend on their fellow-farmers’ hard work to produce extra constituents and volumes and short-change them this month again on milk prices,” he said.

“At just under 29c/l + VAT, the main Irish co-ops currently pay up to 1.5c/l less than the May Ornua PPI of 30.45c/l + VAT (32.09c/l incl VAT).  The gap has increased in the last two months as the PPI rose and co-ops cut prices.  The Ornua PPI is most likely to at least hold into June.  Farmers need that extra 1.5c/l to pay the massive bills they accumulated during 2018 – every bit of peak milk income must be available to deal with those debts, many of which are with the co-ops’ own agri supply divisions,” he concluded.

Find the LTO monthly Milk Price Review at http://www.milkprices.nl/