ICMSA say case for rise in price for Feb milk “overwhelming”.

Speaking in advance of the February round of milk price announcements, the Chairperson of the ICMSA Dairy Committee, Noel Murphy, said that all Co-ops need to increase their milk price to reflect market realities and to provide dairy farmers with a badly needed ‘confidence boost’ after an extremely difficult 12 months.  

Mr. Murphy said that February has been a positive month in terms of dairy products prices and that – excepting January – this positive trend has been ongoing since last September. Mr. Murphy said that improvements were undeniable, and it was now imperative that those improvements made their way back to the farmer-producer in the form of improved milk price. He described the case for an increase in the price paid to farmers for February milk supplies as overwhelming.

“Co-ops were very quick in Spring 2023 to pull milk prices by large amounts and we do need to see equally strong signals in the opposite direction now.  While there are several early season bonuses being paid by the different milk purchasers, their base price will have to improve substantially to offset the inevitable removal of these bonuses and even besides that, the market justifies improvements in base price”, said Mr. Murphy.  

The Dairy Committee Chairperson said that it was evident that dairy market sentiment had become notably positive over the course of February, after a stable-if-slightly-stagnant January. ICMSA believed that the positivity was based on a weak supply situation globally set against constant demand. While acknowledging a slight reduction in the Global Dairy Trade this week, Mr. Murphy noted that we have seen six consecutive GDT increases and, in turn with European quotes, increases in butter ‘spot prices’ have driven the markets to a 14-month high.  The industry standard Butter/SMP mix is now returning over 43cpl and WMP achieving just over 42cpl.  

“While those quotes merely suggest the trend or ‘road of travel’ that milk price will take in the coming months, the PPI should show increasing returns for the products sold over the course of February 2024.  This is turn should be more than sufficient for milk processors to increase base prices – an increase that’s more than justified and which has to be set against historically high costs of production. We need that margin and in the face of stubbornly high inputs and regulatory restrictions”, concluded Mr. Murphy.

Ends      6 March 2024

Noel Murphy, 086-3815575

Chairperson, ICMSA Dairy Committee

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office