Second Consecutive Price Cut by Aurivo a Blow to Farmers in the West

IFA National Dairy Chairman Tom Phelan said the decision by Aurivo, uniquely among co-ops, to cut their milk price for a second month running was a real let down for their suppliers, at a time when markets and the outlook for 2019 justifies price stability.

Mr Phelan said this decision was major blow, particularly in what has been a very difficult year for farmers.  It was crucial that Aurivo would outline to farmers what their plans are to returns the optimum milk prices in 2019.

 

“Our research shows that that the majority of indices relevant to EU dairy markets, whether it is EU MMO average market prices, spot prices and futures for the first half of 2019 suggest a milk price equivalent of around 30c/l + VAT. While this obviously would vary based on product mix and timing of sales contracts, it is also reflected by the November Ornua PPI which is equivalent to 29.69c/l + VAT (31.3c/l incl VAT),” Tom Phelan said.

 

“The IFA National Dairy Committee has lobbied to avoid price reductions at a time when we know the market place justifies stable prices.  The majority of co-ops have maintained their pay-out this month, at the end of one of the most challenging years dairy farmers have ever experienced.  Co-ops gave farmers very necessary fodder and credit support, which was appreciated.  The majority, including Aurivo, consistently paid less than the Ornua PPI equivalent from May to September 2019, as we stated last month,” he added.

 

“I urge the Aurivo board to carefully review the market situation and the outlook for spring, and to outline to their very concerned suppliers how they are going to optimise milk prices through 2019,” he concluded.