ICMSA predicting “historic” milk price of 50cpl for this year’s peak production

Speaking in advance of the next week’s round of milk price announcements on April supplies, the Chairperson of ICMSA’s Dairy Committee, Noel Murphy, has predicted that milk prices will break the historic 50cpl barrier.

Milk price has been hitting record levels each month this year as the surge in dairy markets that began in the last months of 2021 continues. The wholesale market for milk continues to return prices in excess of 60cpl after processing costs despite the levelling of demand for products in the last number of weeks.

Products sold during April have averaged over 63cpl for the Butter/SMP mix and 62cpl for WMP in the Dutch dairy quotations, this includes an increased processing cost of 10cpl to cover increased inputs on the milk processing side. Taken with a 13 basis points increase to the Ornua Purchasing Price Index for April shows the ongoing dramatic increase in the commodity basket of dairy products.

Mr Murphy said that were “of course” inflationary input price pressures on the processing side that are causing volatility in product returns with the same volatility present at farm level. But Mr Murphy said that there was absolute scope to increase the base price in excess of 50cpl for this month with room for another increase again for the peak production month of May.

“Even with last week’s fall in the GDT auctions, there is still higher prices feeding their way back such that we predict that farmer milk price for April and May supplies should be 50cpl base price,” said Mr Murphy.