IFA: Co-ops have questions to answer on falling milk prices

IFA National Dairy Committee Chairman Tom Phelan has challenged co-ops to address farmers’ questions as to why are milk prices falling, and why have they fallen so much behind European levels.

Mr Phelan pointed out: “Well respected Europe-wide, the LTO monthly milk price review is published by Dutch farm organisation LTO, and includes three Irish co-ops, Dairygold, Glanbia and Kerry. In the last year, the gap between the average of the LTO review and the average paid by the three Irish co-ops has increased from €1.3/100 kgs in July 18 to €3.6/100 kgs in July 19. While overall milk price levels have eased over that period, European averages have clearly stabilised since March, yet Irish prices have continued to dip, especially in the last couple of months,” he said.

“We recognise that markets have eased in the last year, however Irish milk prices seem to have fallen more than most. Irish co-ops have been diverging away from European pricing trends and undershooting the Ornua PPI for the majority of the last 11 months.

“It is no wonder Irish farmers are asking questions: co-ops must now answer them and make solid commitments on milk prices for the rest of the year,” he added.

This week, Dairygold Co-op confirmed its base price for August, based on standard constituents of 3.3% protein and 3.6% bufferfat (inclusive of VAT and bonuses) is 28.69 cents per litre (cpl).

This represents a 1 cpl reduction on the July base price of 29.69, which in turn was a similar reduction on its price for both May and June.

In a statement the Dairygold board said dairy markets continued to be ‘challenging”, with recent butter returns principally being the significant influencing factor.

“Regrettably, a downward milk price adjustment is necessary,” read the statement.