FA National Dairy Committee Chairman Tom Phelan today pointed out that, as well as paying up to 1.5c/l less than the May Ornua PPI, and undershooting it for the last 6 months at least, Ireland’s main milk purchasing co-ops had underperformed massively in the Dutch LTO European milk league in the last 12 months. LTO tracks the price paid by a selection of milk purchasers in the main EU dairy production countries. For Ireland, it tracks Dairygold, Kerry and Glanbia.
“It is clear that Irish co-ops have been doing a much poorer job at remunerating their suppliers than the European private and co-operative milk purchasers tracked each month by Dutch farm organisation LTO in their Milk Price Review. The main 3 Irish processors are currently paying €2.25 less per 100 kgs of milk than the average monthly price reported by LTO. This is equivalent to just under 2c/l at 3.3% protein and 3.6% butterfat, and as the graph overleaf shows, the gap has widened dramatically in the last 12 months,” Mr Phelan said.
“In a couple of weeks’ time, co-op boards will start to consider their June milk prices. It is widely expected that volumes will have continued to grow significantly. Board members cannot depend on their fellow-farmers’ hard work to produce extra constituents and volumes and short-change them this month again on milk prices,” he said.
“At just under 29c/l + VAT, the main Irish co-ops currently pay up to 1.5c/l less than the May Ornua PPI of 30.45c/l + VAT (32.09c/l incl VAT). The gap has increased in the last two months as the PPI rose and co-ops cut prices. The Ornua PPI is most likely to at least hold into June. Farmers need that extra 1.5c/l to pay the massive bills they accumulated during 2018 – every bit of peak milk income must be available to deal with those debts, many of which are with the co-ops’ own agri supply divisions,” he concluded.
Find the LTO monthly Milk Price Review at http://www.milkprices.nl/
IFA Dairy Chairman Tom Phelan said access to potentially skilled employees from outside of the EU cannot be closed off when our current national labour market is at full employment (4.6% unemployment in April 2019).