13 Sep 2012
CO-OPS CAN AND MUST LIFT MILK PRICES TO HELP RESTORE FARM PROFITABILITY – KIERSEYDairy
Welcoming the first step taken by Glanbia and Town of Monaghan to increase milk prices, IFA National Dairy Committee Chairman Kevin Kiersey urged all other co-ops to follow suit, and said there was now good scope from improved market returns for further price increases to help farmers restore their profitability.
“Dairy market prices have increased very significantly since May. EU butter prices have risen by around €600/t or 24%, SMP by €700/t or 36%, whole milk powder by €500/t or 23%, and whey powder by €250/t, around 33%. Only Cheddar cheese has been disappointing, but cheese prices do tend to follow the butter/powder trend, even if it is with a lag,” Mr Kiersey said.
“Gross returns from European markets have increased by 9c/l to 37c/l for SMP and butter, and by over 6c/l to 35.5c/l for whole milk powder. Even allowing for processing costs, a farmer price of at least 30c/l + VAT is very justifiable based on such returns,” he added.
“Internationally, the market trends continue to be positive, with strong results from the last three Fonterra auctions, and increases in international quotations for all dairy commodities influenced by shortages linked to the US drought, and falling supplies in all regions,” he said.
“I am quite clear that there is now real scope as well as a very real need for co-ops to improve milk prices much further to help farmers deal with massive production cost increases linked to rising feed prices and the continued dire impact of the bad summer weather on silage quantity and quality,” he concluded.