ICMSA acknowledge milk price rise but say figures & market data prove that Irish prices have “ground to make up”
Acknowledging the 1cpl price rise increase from Kerry and Glanbia Ireland for November milk supplies, ICMSA Dairy Chairperson, Ger Quain, described it as very welcome and a starting point for the further rises required to “make up the ground” and bring Irish milk price into some kind of parity with underlying market data and international comparison. Mr. Quain said that despite the slight reduction in the last GDT (Global Dairy Trade Auctions) – the first, he noted, since September – there was still a visible disconnect between the prices paid to Irish farmers and their counterparts, in support of that he cited the fact that New Zealand’s Fonterra yearly milk price is on a par with Irish processors and actually went above one of our processors for the month of October. In addition, Mr. Quain said that Irish processors have consistently lagged their European counterparts when paying for milk.
“Figures from the Dutch Dairy Board show that the Irish processors were over €3 per 100kg below the European average for the rolling 12-month average up to October 2019. The average milk price paid across Europe in those 12 months was € 33.59 per 100kg with the three Irish processors listed paying out well below that at an average ranging from €30.44 to €31.18 per 100kg, 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 the US milk prices at €42.39 per 100kg for October and €35.98 per 100kg for the rolling 12-month period. These are the actual figures and farmers are rightly asking how can Irish processors be so far behind our competitors even after factoring in this month’s increase?” asked Mr. Quain.
“A cursory glance at the Milk Market Observatory shows the ground to make up through price rises that must be delivered next spring. EU SMP prices are now at €250 per 100 kg, their highest level in 5 years, while EU WMP prices are €309 € per 100 kg, this is +19.3% above the five years’ average. There has been a significant increase of cheddar prices in Oceania and the US (5.3% & 6.2%) while EU butter and cheese exports to Japan have risen +65% and +5% respectively. Butter prices did fall over the early course of 2019 but have steadied since August resulting in a situation that has EU exports of butter to the US up 26% this year with overall EU exports of butter, SMP & cheeses up by +35%, +26% & +5% respectively to October and EU SMP exports to China +47% and Indonesia +46% through to October”, he said.
The ICMSA Dairy Chairperson said that the November milk price rise must be considered as a “good start” but no-more than that. “There is going to have to be a series of price rises through Spring 2020 that brings our price back into line with that kind of growth data and our competition and we’ll be watching this very carefully and monitoring the closing of the gap that has to happen”, concluded Mr. Quain.
Ends 16 December 2019
Ger Quain, 086-3623041
Chairperson, ICMSA Dairy Committee
Cathal MacCarthy, 087-6168758
ICMSA Press Office
ICMSA Head Office
John Feely House