Commenting on milk price decisions announced thus far by co-ops for milk collected from farmers in December, IFA National Dairy Committee Chairman Sean O’Leary has said farmers whose milk purchaser has not increased their December milk price to at least 30c/l including VAT are entitled to feel very disappointed.
He said EU market returns throughout the month, and even the most recent GDT results, all justify continued milk price increases and IFA’s very realistic expectation is that Irish co-ops can and must deliver at least 33c/l before peak.
“Throughout December and into the first week of January, EU market returns based on the average prices reported by the EU Milk Market Observatory have exceeded 37c/l before processing costs, which is equivalent to a farm gate price of 32c/l + VAT,” Mr O’Leary said.
“Even the first two GDT auctions of 2017, which resulted in a weighted average price decrease of 3.9% on 3rd January, and a marginal increase of 0.6% yesterday, have not fundamentally challenged the positive trend in global dairy prices. The butter and SMP prices reached at yesterday’s auction would return a gross 38.3c/l, equivalent to a farm gate price of over 33c/l + VAT,” he added.
“With global milk output continuing to fall back as we come into the Northern Hemisphere season, solid demand both from developed and emerging countries and a responsible approach to intervention stock management by the EU Commission, there is no reason for co-ops to hesitate in passing back the maximum price improving markets allow,” he said.
“Ornua have predicted that the 2017 milk price would average out at up to 33c/l at base constituents – and we are confident in continuing to urge co-ops to deliver on this level before peak to ensure, as volumes build up, farmers can recover promptly from a year of exceptional cash flow stresses,” Sean O’Leary concluded.