13 Jan 2020
LAKELAND SHOWS THE WAY, BUT INCREASES WILL BE NEEDED BY ALL CO-OPS FOR SUSTAINABLE 2020 MILK PRICESDairy, Dairy Markets
IFA National Dairy Chairman Tom Phelan today said Lakeland Dairies Co-op, by increasing their December price by 1c/l, had shown the way for other co-ops to follow.
The Ornua PPI for last month had increased to a milk price equivalent to 32.3c/l incl VAT, nearly 2c/l more than the average paid by co-ops for November – generalised milk price increases are well and truly overdue.
Mr Phelan urged the other co-op boards who will be deciding December milk prices this week, to follow the Lakeland example for December, and in order to get back to paying a sustainable milk price for 2020, to plan for further increases before the new season commences.
“We monitor market indicators for Europe and the global market, and calculate the milk price equivalent from the dairy commodity prices reported. Those have improved quite significantly over the last 5 to 6 months, as shown in the graph,” Mr Phelan said.
“Still, our co-ops have not increased milk prices as much as they clearly can, and we urge them to correct the situation ahead of spring. The high solids which underpinned milk cheques in the autumn will have crashed when milking resumes next month, and farmers will find themselves under serious cash flow pressure,” he said.
“A milk price increase of 1c/l on December milk supplies is the minimum co-ops must pass back to farmers, but they must also start planning to deliver sustainable milk prices for 2020, and this will require further increases before the season recommences,” he concluded.