The Irish Dairy Board and Co-ops based on current market prices have been holding back on farmers and it is about time that dairy farmers got the true returns from the marketplace according to Mr. Pat McCormack, Chairperson of ICMSA's Dairy Committee. The full hardship of 2009 was passed back very quickly to dairy farmers but now Co-ops are holding back on farmers and are not passing back the full benefits of the improved marketplace.
In June alone, based on the Irish Dairy Board on-account price, ICMSA estimates that Co-ops underpaid farmers to the tune of 2.5 cents per litre which is equivalent to €17m or about €850 per dairy farmer, at a time when many dairy farmers are still trying to clear the debts left behind from 2009 both with banks, Co-ops and other input suppliers.
ICMSA also believes that the Irish Dairy Board should be paying a higher price for butter at this time given market conditions and the fact that Dutch quotations for butter are over 1.7 cents per litre higher than the Irish Dairy Board price. The Irish Dairy Board is the marketing arm for Irish dairy farmers and farmers are insisting that the benefits of the IDB must be fully reflected in milk price.
The reality of the marketplace at present is that while the market did weaken slightly in July for powders, there are signs of improvement in the latest Dutch Dairy quotations with SMP up €30 per tonne while butter prices have remained very stable at a price substantially above what the Irish Dairy Board is paying at present.
Based on current returns from the Irish Dairy Board, ICMSA estimate that Co-ops at the very least should be paying a price in excess of 31 cents per litre including VAT for July for the butter and SMP combination while the other dairy products are returning prices higher than this. Dairy farmers still have many bills to pay and Co-ops boards must insist that the full returns of the marketplace are passed back for July with a milk price increase to at least 31 cents per litre, concluded Mr. McCormack.