May milk price hike urged as butter soars

QA vital as processors clampdown on farmers

these improvements in their May milk cheque, which is a key month for determining dairy farm income for the year,” he said.

The ICMSA said the GDT auctions have seen the index rise by 10pc over the last eight weeks, with the butter and skimmed milk powder returning 38c/l before processing costs.

Mr Quain said some co-ops and processors have been paying up to half a cent below the Ornua Purchasing Price Index for the first four months of the year.

“The difference between paying 31c/l and the stated PPI price for just the first four months amounts to over €2,500 on a farm that MILK producers without Bord Bia Quality Assurance accreditation are facing total rejection by all dairy processors of milk supplies from their farms within months.

Processors are intensifying pressure on “non-compliant” suppliers to obtain certification with warnings that non-certified milk will not be accepted by the end of the year.

Of the eight top processors in the country, it is understood that suppliers to four have achieved 100pc accreditation. Rejection of non-QA milk supplies has been introduced in some areas, while other processors are penalising non-compliant suppliers by at least 2c/ltr on milk price.

Arrabawn’s Conor Ryan warned “the next six months will be critical” for full participation is supplying 350,000 litres a year. That’s a great deal of money to farmers still looking at a stack of 2016 bills,” he said.

Glanbia Ingredients Ireland’s Jim Bergin said the “very high price” for butter was “worrying”.

“WMP is at a strongish price and we know the African and Middle Eastern markets are sluggish, particularly because of the oil inf luence,” said Mr Bergin, while SMP intervention stocks was a “shadow overhanging the market”.

“You have the protein portion of the milk at a very low price and you have the fat portion at a dangerously high price, and the market because it will no longer be acceptable that 1pc of non-compliant producers can effect the benefit of the scheme. He said 97.7pc of suppliers have QA.

“While we have not got to that point yet, other co-ops are now refusing to collect milk from farmers who are not involved in it,” he said.

Mr Ryan said a small number not participating were generally older farmers that may not remain in milk production.

The co-op is working with them as within months the society will have to cease collection of milk from non-certified farms.

Of the 16,817 dairy farmers who have applied for Quality Assurance, Bord Bia has confirmed that 14,749, which represents 87.7pc, have now been fully accredited following audit inspection. could suffer because of both.” Mr Bergin said they see the milk price as “stable” at the moment, while the market demand has been “fragile”.

Meanwhile, Arrabawn chief executive Conor Ryan told the Co-op’s AGM he had reasonable confidence that “the milk price will remain stable over the coming months”.

“Overall, EU prices have stabilised, though butter is probably driving it on longer than we expected,” he said.

The society confirming that a quarter of the suppliers had taken up the option in 2016 of a fixed price of 30.6c/ltr for 10pc of supply for three years, while the EU milk reduction scheme in 2016 was worth €250,000 to the society suppliers.

Arrabawn chairman Sean Monahan said that the society had supported the milk price by €1m in 2016 to pay an average of 27c/l — down 3.4c/ltr on 2015 — while the butterfat average increased from 4.04pc to 4.27pc, but average protein dropped from 3.48pc to 3.43pc.

The society recorded an operating profit of €4.6m, up €2.5m on 2015 and employment increased by 7.5pc to 374 to handle increased output of 21 million litres.