ICMSA repeat ‘quota bubble’ warning
The Deputy President of ICMSA and Chairman of its Dairy Committee, Pat McCormack, has once again expressed concern about the prices being paid for quota in the latest exchange with prices varying from 8 to 50 cents per litre. McCormack repeated his organisation’s opinion that the prices being paid in some Co-ops made absolutely no commercial sense and he warned that we are confronting ‘a bubble’ linked to the abolition of milk quotas in 2015.
“The increase in the price of quota in the last two exchanges has to be of concern to both individual farmers, and to the sector generally, with the average price at national level effectively doubling in twelve months. The reality is that we have seen a dramatic and unjustified explosion in the cost of quota. Regardless of the means of assessment and by any conceivable measure, these price increases make no commercial sense”, stated the ICMSA Dairy Chairman.
“Some Co-ops have a case to answer here through their failure to set out – in a comprehensive and credible fashion – their complete plans post quota-abolition in 2015. We have as well a raft of speculation and announcements on some aspects of their post-2015 policy made by some Co-ops, all allied to a steady stream of notices and warnings to milk suppliers regarding seasonality penalties and possible capital contributions schemes post April 2015, which are all contributing – and in my view, unnecessarily – to this substantial inflation in milk price. There is a bubble and ultimately it will be dairy farmers who will pay for it. At a time when quota prices should be falling, the opposite is the case. We all know this but people who should be giving more direction and speaking out on these matters have chosen to remain silent. ICMSA wants Co-ops set out their plans clearly for farmers to see in a manner that will then (the farmers) to plan in a logical and commercially sensible manner that it itself based on their Co-ops’ policy”, stated Mr McCormack.
Pat McCormack. 087-7608958
Deputy President, ICMSA and Chairman of the Dairy Committee
Cathal MacCarthy, 087-6168758
ICMSA Press Office