Milk prices rise but market still ‘volatile’

DAIRY processors’ decision to increase milk prices for July supplies has been welcomed by IFA and ICMSA.

Both farm organisations called on the other main milk processors to follow the lead of Lakelands and Kerry by increasing returns to their suppliers.

Both Kerry and Lakeland Dairies increased their July milk price by 1c/l.

Kerry are now on 32c/l VAT inclusive, while Lakelands have moved to 32.78c/l.

Lakelands said the increased July milk price was in recognition of the “difficult conditions being experienced by dairy farmers as a result of the extended period of very dry weather”.

In a further move, Lakeland has also introduced a €20/t discount on every tonne of fertiliser bought by milk suppliers and shareholders from August 1 to the end of September.

Glanbia will also pay 32c/l for July milk. Glanbia Ireland (GI) has maintained its base milk price for July at 31c/l, with Glanbia Co-op making a support payment to members of 1c/l.

Commenting on the processor’s milk price, Glanbia chairman Martin Keane cautioned that market returns remained volatile.

IFA dairy committee chairman Tom Phelan said the Lakeland price increase was welcome given the difficult conditions farmers were facing.

He noted the continued 1c support from Glanbia Co-op, but said farmers would be dis- appointed that Glanbia Ireland did not increase its price to reflect market returns.

Mr Phelan said last week’s move by Kerry to increase its July milk price showed there was scope for processors to improve returns to suppliers.

He called on other co-ops to follow this example and support their farmer suppliers with “a much-needed cash-flow boost”.

Fodder

“At a time when farmers continue to struggle with the weather-related events and fodder availability, co-op boards need to redouble their efforts to reflect the European market,” he said.

“While co-ops have brought forward different measures to support dairy farmers, there is no question that paying the highest milk price that market returns allow is always the best support for farmers,” Mr Phelan argued.

ICMSA’s Ger Quain said it was crucial that the highest possible milk price is paid to suppliers “as they struggle to source and secure fodder” going into autumn and winter.

“The relative stability in the wholesale market should give processors a chance to evaluate price from here until the end of the year.

“We want them to avail of that opportunity to make the decision to really help their suppliers at this critical time,” Mr Quain said.

He pointed out that Ornua’s PPI equated to 32.1c/l and he claimed that this should be the base processors paid for milk.