Jun 062014

The Deputy President of ICMSA, Pat McCormack, was very critical of GIIL’s  decision  to cut their  milk  price by 2 c/L at their meeting last Friday and  he said the decision  was particularly reprehensible in light of the fact that current market indicators show that the softening of prices on world markets has actually levelled-out and a slight rebound may be underway.

“The latest Dutch Dairy Quotations showed improvement this week across all categories and we also saw a rebound for cheddar and SMP in the latest Global Dairy Trade Auction. All this is set in the context of Dutch processor Friesland-Campina increasing prices next month along with a number of UK processors. This was the time for stability in the Irish dairy market with Co-ops showing leadership and not adding volatility in the market – and that was definitely not what we  got  from GIIL. We estimate that this unnecessary cut will cost a 300,000 litre supplier €840 off his May milk cheque and over €4,200 going forward to the year end. We needed the state’s biggest processor of milk to stand up for their suppliers and hold the May milk price and instead we got a decision that unjustifiably, in our opinion, takes very sizable sums out of suppliers cheques”, said Mr McCormack.

“There is another factor here: Irish processors have constantly lagged their world counterparts when paying for milk. Looking at international milk price comparisons, it shows that Irish Co-ops are continually paying a lower price to their milk suppliers than their European and World counterparts. The monthly calculations undertaken by the Dutch Dairy board show that the Irish processors  were  close to 1 euro per 100kg below the European rolling  average for April. The 12 month rolling average milk price paid across Europe in April was €39.73 per 100kg and the Irish processors paid out 38.94 and 38.77 respectively. These prices are excluding VAT and 4.2% fat and 3.4% protein.  More worrying is the fact that Irish processors are now below New Zealand and US milk prices for the month of April and the difference is close to 2 euro per 100kg. This result underlines a dramatic turnabout in the last five years when Irish prices were above those of NZ and US by up to 40%. This has changed radically and very  recently with New Zealand and the US increasing their prices substantially to overtake the European average”, he noted.

“Irish milk processors have it well within their power to hold milk price at current levels for the coming months if the markets remain at their current position – and  that’s exactly what they should  do”,  concluded Mr McCormack.

Ends     6 June  2014.

Pat McCormack, 087-7608958

Deputy President,  ICMSA.


Cathal MacCarthy,  087-6168758

ICMSA Press Office