ICMSA is expecting a surge in milk prices

THE Chairperson of ICMSA’s Dairy Committee has said that his association expects the prices to be announced over the next days by processors for milk supplied in May to reflect what he called a “surging recovery”.

Gerald Quain said that the rally that had begun in the last week of April had actually picked up pace, and industry standard indexes were now climbing upwards on the back of food services’ re-openings, normal consumption patterns being resumed, and projected data from important dairy producing regions.

Mr Quain said that all the market data pointed overwhelmingly to a base price of at least 29 cents per litre which, Mr Quain said, had to be the sector minimum price as indexes continued to climb and look set to even pass the pre-COVID prices shortly.

“Certainly, farmer suppliers will want to see the market situation accurately reflected in the price their milk processors will be paying. The PPI has gone up by the equivalent of 0.5cpl in the last four weeks, while even that rise significantly lags the 5cpl that the spot butter/SMP went up by in the five weeks back to the start of May. In addition, WMP went up by 0.5cpl over the same period and wherever we look we see prices, indices and market rapidly regaining.

“Realistically, we want to see the reopening and recovery proceeding at a coherent and safe pace, and that means prudence and proportion have to be the watchwords. But it also means that all milk processors must be paying – as a minimum – 29cpl for the milk supplied last month, and that will mean that some processors will have to increase May milk price,” he said.