Fonterra raise price range again but ICMSA say Irish Co-ops are “dragging their heels on price”

The Chairperson of ICMSA’s Dairy Committee said that today’s (25/01) announcement by Fonterra Co-op in New Zealand that its forecast milk price for 2022 will further increase is a clear indication of the direction of milk price. Mr Noel Murphy said that while the Association expects price-per-litre to reach 43 cents by this year’s peak, any gains are being ‘eaten through’ by unprecedented input levels. Mr. Murphy said that the onus was now squarely on Co-op boards to ensure that milk price going forward is “at a minimum” in excess of the monthly Ornua PPI. He said that while farmer milk price did move forward for December milk, it still demonstrably lagged base Ornua PPI and he pointed out that this was the case without even including the value-added component.  

 “The cost of fertiliser, in particular, is a huge burden on all farmers this Spring and the cost of inputs in general 2022 will be a massive challenge and drain on farm income.  The only answer is for milk processors to ensure that the milk price paid to farmer-suppliers is maximised. As far as ICMSA is concerned that’s going to mean that the baseline must be the Ornua PPI, which currently is equivalent to 41.5cpl excluding the value-added component.  No milk processor achieved this price and as Co-op prepare to set milk price for January, their boards will have to insist that the Ornua PPI on that date is the minimum milk price paid to farmers. The reality is that Irish Co-ops are dragging their heels on price while inputs surge ahead,” said Mr. Murphy.

 The ICMSA Chairperson said that the parameters of the issue were now clear and it was up to every board of every Co-op to step up and set a price that used the Ornua PPI as the baseline.

 Ends     25 January 2022

 Noel Murphy, 086-3815575

Chairperson, ICMSA Dairy Committee

 Or

 Cathal MacCarthy, 087-6168758

ICMSA Press Office