May 102011

The Chairman of ICMSA's Dairy Committee has said that based on the continuing solid market returns there is a very strong argument for an increase in the milk price paid to dairy farmers. Pat McCormack said that he estimates that an increase 1.5 cent per litre is justified on the present price of 33 cent per litre. He was critical of the recent trend where processors seem reluctant to move in line with market improvements and he noted that the prices being paid at present by Co-ops are most certainly falling behind the returns from the markets. "I strongly believe that farmer director must be more determined on this front when their Boards set the monthly milk price. There is no justification for this delay because these are actual prices being paid by the IDB – not forecasts or estimates."


On the subject of the proposed IDB index, Pat McCormack said that he was very concerned that less information on actual market returns may be available from IDB in the future to farmers and their representatives.


"Effectively the IDB are 'switching off the light' on milk price data and facts. This is a wrong move and one that is not acceptable to ICMSA. Whatever about the shortcomings of the butter and skim milk 'on-account' prices they are actual figures on the real market. The complete replacement of these figures with a mere index that will only give percentage changes has to mean that less information is available to farmers on what is happening in the market", observed Mr McCormack.


"At a time when we could be moving to greater price volatility and when huge investment decisions have to be taken, this is the wrong move. Logic and experience tells us that there should be greater price transparency – not less.  A price index showing only percentage changes will not – and cannot – give the direct information that will enable farmers to measure their own co-op's performance in terms of cents per litre. Farmers have a right to know how the IDB and their own co-ops are performing compared to others in the international market in which they operate. The IDB index, as now proposed, would cause confusion and be the source of endless disagreement on the exact returns from the market place. Such a regressive move is not acceptable to ICMSA", said Dairy Committee Chairman