IFA National Dairy Committee Chairman Sean O’Leary today (Wednesday) welcomed decisions by Glanbia and Lakeland this week to hold their April milk price.
He said that while the market remained very challenging, farmers had reached rock-bottom on the level of price cuts they could tolerate, and are now receiving prices below production costs in most cases. He urged all other co-ops to follow the Glanbia and Lakeland example.
“The Ornua PPI for April, at 81.4 points, is equivalent to a milk price of 22.7c/l including VAT. Most co-ops are clearly supporting milk prices, but the reality is that they have to – because farmers do not have the resources to cope with prices that are now well below production costs for the majority,” Mr O’Leary said.
“The Irish dairy sector cannot thrive for the long term if it relies on farmers carrying too much of the market and price risk. Support is essential. In the short term, it must be about co-ops holding milk prices, finding efficiencies and cutting costs in every other area of activity,” he said.
“It must be developed for the medium and long term into the provision by co-ops, Ornua and other stakeholders of risk management tools such as milk price hedging options, margin insurance schemes, volatility proof taxation and flexible finance whose repayments vary with milk prices, along the lines of the Glanbia MilkFlex package,” he concluded.