16 Aug 2016
THERE MUST BE NO STALLING ON FURTHER MILK PRICE INCREASES – HEALYDairy
Speaking this morning (Tues) IFA President Joe Healy said there must be no stalling by co-ops on further milk price increases, and he would meet them in person to convey this message over the coming weeks.
The IFA President said major milk price improvements are both necessary to boost farmer confidence and their badly damaged cash flow and justified by a real market recovery. He called on co-ops that had yet to decide on the July price, especially those at the bottom of the league, to first follow the Lakeland, Glanbia and Arrabawn example by increasing July prices, but also for all co-ops to budget and plan for significant further milk price increases for August and beyond.
“Our call for milk price increases is firmly founded in a very real market recovery, which has seen EU dairy commodity returns increase by 5c/l in the last three months, to an early August level equivalent, after 5c/l processing costs, to a farmgate milk price of 25.38c/l + VAT (26.7c/l incl VAT),” Mr Healy said.
“Co-ops can be confident about increasing milk prices: the long awaited dairy market recovery has really taken hold. It reflects much slower growth or even decreased milk production in Europe, but also globally, and relatively healthy demand growth despite the Russian ban and lower oil revenues. Indeed, NZ business bank ASB Markets have predicted this week a 12 to 15% increase in this afternoon’s GDT price for whole milk powder, based on the evolution of NZX futures in the last few days,” he said.
IFA National Dairy Committee Chairman Sean O’Leary added: “While many dairy farmers I spoke to at the Tullamore Show took heart from the recent milk price announcements, all remained seriously worried about cash flow pressure and their inability to make ends meet as merchant credit, superlevy, tax and utility bills pile in. Farmers need every last cent the market is returning, and thankfully the market is improving relatively rapidly.”
“It is now up to all our milk purchasing co-ops to ensure that they first all lift their July milk price in a meaningful way, and then plan for significant additional price increases for August and beyond,” he concluded.