11 Aug 2016
IFA CALLS ON CO-OPS TO FOLLOW LAKELAND LEAD AND INCREASE MILK PRICEDairy
IFA President Joe Healy today welcomed Lakeland Dairies’ decision to increase their July milk price by 1c/l, and he said he expects all co-ops to follow suit, in recognition of the growing recovery in dairy markets.
Earlier this week, Joe Healy launched the IFA’s autumn milk price increase campaign, and will lead IFA representatives in a series of meetings with co-ops over the coming weeks to impress upon them that dairy market recovery is a reality and they must begin to increase milk prices.
Joe Healy said IFA will not tolerate any stalling on milk price increases dairy farmers remain under extreme cash flow pressures after the prolonged market downturn.
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”.