Sep 152015
 

The Deputy President and Chairperson of ICMSA’s Dairy Committee, Pat McCormack, has accused some Co-ops of ‘overstepping the mark’ in terms of milk price reductions given the fact that the Ornua Price Index breaks-down into a farmers’ milk price in excess of 26.9 cents per litre and this price, Mr McCormack emphasised, is based on the very generous processing cost of 6.5 cents per litre estimated by Ornua themselves.  In addition, dairy markets have shown some signs of improvements in recent weeks with two positive GDT auctions while Dutch dairy quotations over the past two weeks have been positive.  The news from Fonterra that its production in New Zealand will be 2-3% lower in the 2015/16 season will certainly have a positive impact on market sentiment, he said

“Dairy farmers have seen their milk prices slashed over the last 12 months and, while they understand the weakness in the market, they are very clearly now asking whether their processor have imposed cuts beyond those justified by the marketplace and ‘overstepped the mark’. Any Co-ops boards that pays less than 26.9 cpl for August milk is going to have to explain to their suppliers exactly how they’re arriving at their milk price because their price is demonstrably at variance with the Ornua PPI. Remember: the last time the index was at its current level was in July 2012 but that month Irish milk processors were paying between 27.5 cents per litre and 31 cents per litre which is substantially above the current prices being paid by most processors. It’s also worth remembering that energy costs were substantially higher at  that stage then they are now while we had the much-vaunted investment in value added dairy products over the intervening period”,  noted Mr McCormack.

Ends      15 September 2015.

Pat McCormack,  087-7608958

Deputy President of ICMSA/

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office