ICMSA querying “over-pessimistic” view on milk price – March price cut cost farmers €15 million

While fully recognising the impact of Covid-19 on dairy markets since mid-March, the Chairperson of ICMSA’s Dairy Committee has queried what he said was the “over-pessimistic” outlook on milk price that was being advanced by certain commentators and bodies.  Ger Quain said that while it was obviously important that milk processors pay the highest possible milk price for April milk and ICMSA would always press for that in any circumstances,  it was already clear at this stage that the market outlook is not as negative as was being advanced by certain analysist that Mr. Quain characterised as “doomsday commentators”.

“We’re not denying that dairy products have taken a hit from Covid-19 with some more impacted than others.  But it’s also true that the market has shown signs of stability in recent weeks and the milk price announcements by Arla Denmark and Friesland Campina that their May milk price will be 32.46c/kg and 31.83c/kg – based on 4.2% fat, 3.4% protein – is certainly encouraging given that these companies operate in similar markets to Irish processors”, said Mr Quain.  

“In the context where an average milk price of 33.26c/kg was paid across the EU for March milk and where Irish processors are already near the bottom of the price league, Irish farmer-suppliers will simply not accept another cut as savage as that imposed by some processors imposed for March. It’s worth noting that the reduction in milk price for March in Ireland was the most severe across the EU. The 2cpl cut for March milk will see close to €15m taken out of Irish dairy farmer pockets – and that’s before before April milk price is announced. An average supplier will lose €9,000 in revenue from March to year end on this milk price reduction alone”, noted Mr. Quain.

The Dairy Chairperson said that when setting milk price, Co-op boards will need to recognise the pressures on farmers and look “inside their own gate for savings”.

“If similar Co-ops across the EU can deliver a milk price for May north of 30cpl, then our own processors need to be at, or close to, this level. If they’re not then serious questions need to be asked by the boards. We are in a difficult period but there are signs of stability and Co-ops must see that and deliver the strongest milk price possible for April given its importance to the rest of the year” concluded Mr. Quain.

Ends      6 May 2020

Ger Quain, 086-3623041

Chairperson, ICMSA Dairy Committee

 Or

 Cathal MacCarthy, 087-6168758

ICMSA Press Office