IFA National Dairy Committee Chairman Sean O’Leary today (Mon) said that fresh data from the new EU Milk Market Observatory suggested that producer milk prices of 38 to 39 c/l + VAT were comfortably justified – and that’s a cent or two more than what co-ops are paying. He added that the dividends and bonuses received by co-ops from the Irish Dairy Board in respect of 2013 trade amount to €13m, and this too would help give co-ops the comfort to hold current milk prices for some time yet.
“Talking down milk prices at this juncture is unnecessary, and it is very unfair to dairy farmers, many of whom are having to finance hefty superlevy bills for additional milk production which benefited co-ops’ export revenues greatly in the last 12 months,” Mr O’Leary said.
“The new Milk Market Observatory was launched last week by the EU Commission, and the latest data available (20/04/2014) indicates that average EU dairy commodity prices have eased, except for Cheddar cheese. IFA has calculated that gross returns (before processing costs) remain around 44c/l for most product combinations and for a representative Irish product mix,” he said.
“The average EU butter price quoted for 20th April was €3,600/t, SMP €3,070/t, WMP €3,550/t and whey powder €950/t. While all those have been easing in recent weeks, Cheddar cheese prices have remained very strong at just under €4,000/t. Based on those product prices, a representative Irish product mix would return 44c/l before processing costs. Irish prices for the same date would return just under 43c/l for SMP at €3,080/t and butter at €3,360/t,” he said.
“There is little doubt that international dairy market returns are easing, however, Irish farmers need to secure strong prices for peak milk, in order to clear out their merchant credit debts and to help deal with the massive superlevy fines many will have to pay over the coming months,” he said.
“I urge co-op board members to resist the temptation to talk down prices when current returns, accumulated 2013 profits and bonuses from the Irish Dairy Board all justify to hold milk prices,” he concluded.