Jul 222013

The Deputy President of ICMSA, Mr. Pat McCormack, said that given the ongoing financial pressures on dairy farmers who are trying to pay massive bills built up since Spring 2012, that he is extremely disappointed at the failure of dairy processors to keep in line with the buoyant dairy market and pay the full market return to farmers.   All the leading market indicators point towards higher milk prices yet the processors are refusing to increase milk prices to reflect these circumstances.

The Global Dairy Trade Auction average weighted price on all products has increased again this month and is a staggering 79 percent higher year on year.   The auction was up 4.9% this week.   The Dutch Dairy Quotations have stayed consistently high for all products since the start of the year and are rising further in recent weeks with the butter/SMP combination now returning 47 cents per litre and WMP returning 47.1 cents per litre.

While processors may dispute some indicators, Mr. McCormack said, that the Irish Dairy Board Price Index is an actual reflection of the actual returns received by Irish processors.   The index is now at a historical high of 126.6 for June.   The index has increased 14 per cent since the start of the year which is not reflected in the increase in milk price.   Based on CSO data for milk price per litre up to May, milk price increases have not kept up with increases in the purchasing index.   For the most recent figures available, official average milk price increased by 3.3 percent between January and May. However the IDB purchasing index increased 12.3% in this period. This means the dairy processors have substantial ground to make up and it is essential that they close this gap, said Mr McCormack.

Manufacturing Milk Prices (including VAT) (Euro) by Product and Month and IDB PPI

  2013 January 2013 May
Milk (per litre), 3.7% butterfat 0.361 0.373
% Change   3.3%
IDB PPI 111 124.7
% Change   12.3%


Source CSO and IDB.

The milk data in this series includes bonuses and June figures for milk price not published yet.

This withholding of milk returns comes at time when farmers are reintroducing concentrates and silage to alleviate grass shortages.   In addition, input costs have not come back and milk processors will simply have to realise that milk price must keep up with input costs going forward.   It is quite clear that milk price has not kept pace with market returns and Co-ops boards must insist that milk price is increased immediately to reflect the market and to allow farmers to meet the large debt burden facing them concluded Mr. McCormack.

Ends      22 July 2013

Pat McCormack, 087 7608958

Deputy President, ICMSA


Cathal MacCarthy, 087 6168758

ICMSA Press Office