As co-ops decide this week on their June milk price, IFA National Dairy Committee Chairman Sean O’Leary said they have some catching up to do to ensure Irish dairy farmers receive the full benefits from improving markets, and competitive milk prices relative to their European counterparts.
Bearing in mind the 6.15c/l gap between best and worst payer in the 2016 Farmers’ Journal/KPMG Milk Price Review, it is time for co-ops to not only up their June milk price, but consider what they need to do to improve their relative returns back to farmers, Sean O’Leary said.
The latest (02/07) EU Milk Market Observatory returns from an Irish product mix have continued to inch up, supported by fast-rising butter prices, and would return an equivalent milk price of 35.6c/l + VAT after deduction of 5c/l processing costs.
“At our regular COPA Working Party on Milk and Dairy Products on Monday this week, we had our usual tour de table on the milk prices paid in each country. Looking just at our main European competitors, Danish farmers will be paid 35.5c/l for June/July milk; German producers will receive around 35c/l for June milk; French producers around 33-34c/l; and, the Dutch Friesland Campina guaranteed price for July milk is set at just over 36c/l,” Mr O’Leary said.
“The LTO 2016 annual European milk price comparison, published this week, is weighted for constituents, SCC, TBC and minimum 500,000kg volume, and it excludes VAT. It shows the average price paid for 2016 supplies by the three Irish milk purchasers it monitors (Glanbia, Kerry and Dairygold) at just over 24c/l. That is just over 4c/l below the average of all the milk purchasers’ monitored by the LTO,” he added.
“The FJ/KPMG Review should focus the minds of all co-op boards this month and in the months to come. Not only do they need to up their June milk price, they also need to devise strong efficiency and marketing strategies allowing them to better leverage our Origin Green market advantage and return stronger milk prices back to farmers on an ongoing basis,” Sean O’Leary concluded.