Co-ops have scope to lift July milk price further

IFA Dairy Committee Chairman Tom Phelan said that co-ops have the opportunity to pass back more of the continued improving market value which has followed the end of lockdown and the increase in food services and international trade over the last three to four months.

Mr Phelan said at least some co-ops have scope to increase prices by 1c/l for July milk.

“The GDT -5.1% blip earlier must be put in context: it concerned almost only Oceanian product, much of which as yet unproduced in the first month of the season, and takes place in the slowest month in the trading calendar,” he said.

Meanwhile, European average butter prices rose €50/t during July, with powder prices remaining relatively stable after a good recovery from their April/May lows. Spot quotes for butter have stabilised in recent weeks at €800/t above where they were in mid-April, with SMP spots €250/t higher over the same period.

“International milk price comparisons also show that Irish milk purchasers perform below par: the LTO/ZuivelNL Monthly Milk Price Review for June 2020 shows the three participating co-ops Kerry, Dairygold and Glanbia respectively come in €1/100kgs (Kerry) and €2/100kgs (Dairygold and Glanbia) below the average for the main European processors,” he added.

“The Irish Farmers’ Journal League for June 2020 shows a gap between top and bottom of 2c/l – equivalent to €1,250 for the June output of the average producer.

This clearly suggests some co-ops have scope to improve their position and their suppliers’ cashflow by lifting their July milk price by at least 1c/l,” he concluded.