The Chairperson of ICMSA’s Dairy Committee has called on all Co-op Boards to set a milk price for February of at least 32 cpl describing that price as “fully justified and based comfortably on market returns”.
Mr. Quain said that despite the reductions in the GDT (Global Dairy Trade Auctions) in the last month, global demand for dairy products continues to grow at 1.5% -2% per annum and global milk supplies in January 2017 have started 1.7% below January 2016 levels with milk supplies lower in all the major exporting regions apart from the USA. Mr. Quain continued to note that milk supplies in the EU – the region where the majority of Irish dairy exports end up – are 3% lower.
“The low milk prices of 2016 have resulted in a sharp fall-off in milk supplies and ICMSA expects this to continue for the first half of 2017, which will have a positive impact on market returns. The Ornua Purchasing Price Index returns for February 2017 remained fixed at 105.4 or 31.4 cpl, but this is based on a processing cost of 6.5 cpl which we’ve always felt is is overly generous to the processors. Given that most processors failed to reach 31.4cpl for January milk, ICMSA is calling on them to increase milk price rise to at least 32cpl for the milk they received in February. The decision by Glanbia not to increase milk price for February is disappointing and at variance with demonstrable market returns at this time. It is simply a fact that the market is simply returning a better milk price than 31 cpl”, said Mr. Quain.
In addition, Mr. Quain said that Irish processors have consistently lagged behind their European 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 counterparts. Figures from the Dutch Dairy Board show that the Irish processors were over €3.4 per 100kg below the European average for the rolling 12 month average up to January 2017. The average milk price paid across Europe in those 12 months was €28.41 per 100kg with the three Irish processors listed paying out well below that at an average of €24.3, excluding VAT and based on 4.2% fat and 3.4% protein. Even more alarming is the fact that Irish processors are also well below New Zealand at €29.28 and US milk prices €34.64 per 100kg for the rolling 12 month period. These are the factual figures and farmers are rightly asking how can Irish processors be so far behind our competitors?”
“It’s well past the time for our processors to step-up in terms of paying a price consistent with market returns and similar international dairy processors and they can and should start by announcing that they will pay 32 cents per litre for the milk supplied to them in February. The gap that has developed is now inexcusable and must be closed”, concluded Mr. Quain.
Ends 14 March 2017.
Gerald Quain, 086-3623041
Chairperson, ICMSA Dairy Committee
Cathal MacCarthy, 087-6168758
ICMSA Press Office