Irish Butter €880 behind Dutch price
THE Chairperson of ICMSA’s Dair y Committee has again drawn attention to what he called “the hugely concerning gap” that has opened up between Irish dair y prices and those of our mainland EU counterparts. Gerald Quain said that his association shares the analysis of other experts within the sector i n predicting a continued strengthening of dair y markets through the remainder of this year with a f urther milk price expected f or August supplies.
The widespread sector optimism is based on market data showing butter shows spot prices continuing to reach record highs in terms of European and Dutch quotes in the last month. Dutch quotations are returning butter at €6,800 per tonne compared to €3,500 twelve months previous, a rise of over 94%. Whole Milk Powder has performed well in that time period up 35% from €2,300 to €3,100, while Skimmed Milk Powder has been steady but still suggesting that the milk price returning to farmers should continue to increase.
Despite these improvements ICMSA has repeatedly drawn attention to the disparity between Irish prices and comparable mainland EU markets. Mr Quain was adamant that very pointed questions need to be answered before concerns can be allayed. “While milk prices in Ireland have obviously improved in 2017, ICMSA would point out that Ireland is currently only in 12 th position of the EU in terms of milk price and furthermore we note that Fonterra - who are heavily geared towards commodity products – pay higher prices than our Irish Co-ops who have for years told their farmer-suppliers that they had to be very cautious on the price they paid to farmers because the future was going to be about moving away from commodity and into value-added. This disparity in milk prices between Irish and EU and Global competitors must be addressed and we will keep stressing it and asking for a logical explanation. The internal market price of Butter within the EU presently shows Irish Butter prices lagging Dutch quotes by a staggering €880 per tonne. Irish butter prices are also €200 per tonne below the EU average as stated by the EU Milk Market Observatory. How can such a disparity exist when Irish product is of the highest possible quality and traceability through the Sustainable Dairy Assurance Scheme and a global brand leader in the form of Kerrygold butter? How can Fonterra still pay higher prices to their suppliers?
This must be looked at in greater detail in the coming weeks so that farmers can feel that they are getting a fair deal compared to the
European counterparts and – in the meantime –we expect to see a substantial price rise for August milk supplies”, he said.