Jun 122015

Following the release of Ornua’s Purchasing Price Index showing a minute 0.4 percentage point drop to 98.5 from 98.9, the Deputy President of ICMSA has said that this key indicator of the value of product traded on markets in the last month show definitively that milk prices should remain unchanged.  Mr Pat McCormack described the fall in the Ornua PPI as marginal and insignificant and he said the Index demonstrated that milk price can – and should – be held in full confidence for May.  “If processors and Co-ops decide to cut milk price for May then they’ll be disregarding the prices achieved by products traded in the last month and that’s why the decision of Lakelands to cut price by 1.5 cpl to 28.75 cpl for May is so disappointing and inexplicable. It’s a serious blow to their suppliers and, for instance, if an equivalent cut were to be implemented across all May milk supplies by the other Co-ops and processors then you’re looking at a €13m reduction in milk cheques to farmers” , he said.

Mr. McCormack also chairs his organisation’s Dairy Committee and he noted that “ Southern Hemisphere ‘Spot’ prices have shown significant softening in the last number of months while Northern Hemisphere prices have not shown such a large reduction.  Estimated EU average milk price stands at €31.03 per 100 kg for May down from €31.30 for April. That estimated figure further strengthens the argument that milk products that were traded in Europe in the last month returned prices equivalent to those achieved in the first four months of 2015.  Ornua and the Co-ops have repeatedly highlighted their strategy of investing in value-added products over the last number of years and this must surely be the time to show farmers the difference between commodity prices and value-added prices because we maintain that the Ornua index is certainly showing it.”

“The PPI history shows that the current level of 98.5 resulted in a milk of 30 cpl as returned in August 2012. This idea of cutting milk price must be studied rationally and using the data available and on that basis –  as well  as by reference to the record of the PPI and prices paid to farmers at various points on that Index  – then current milk price is at a fair and easily justified level”,  concluded Mr. McCormack.

Ends       12 June 2015.

Pat McCormack, 087-7608958

Deputy President, ICMSA.


Cathal MacCarthy, 087-6168758

ICMSA Press Office