ICMSA Expecting ‘ Substantial Milk Price Rise’ to be announced

THE Chairperson of the ICMSA Dairy Committee Chairperson, Gerald Quain, has confirmed that looking at the price and market data around the peak milk production month of May has led his organisation to expect a price rise to be announced shortly that will see all Co- ops and processor paying at least 33 cents per litre for milk supplied in the last month. Mr Quain said that dairy markets have seen butter price rise sharply to stand significantly above the prices that applied at the start of April with the price gaining strength throughout May. Nor was butter alone, he said, noting marked price rises in WMP, SMP and cheddar over the same period. The ICMSA dairy expert noted a raft of date that all point to the substantial price increase they are now demanding for milk suppliers.

· At a global level, the Global Dairy Trade ( GDT) auctions have increased consistently with five consecutive positive results leaving the index over 10% higher in the last 8 weeks.

· The standard Butter/ SMP combination in the Dutch quotations is returning 39.8 cpl before processing costs on 24th May as compared to 36.1cpl on 3rd May.

· WMP powder returns on the Dutch quotations have increased from 35.8 cpl before processing costs to 38.6 cpl over the same period.

· In the GDT Auctions, the Butter/ SMP combination is returning 38cpl before processing costs and WMP 38.6 cpl before processing costs on May 17th.

· In the UK, quoted figures show that the Butter/ SMP combination is returning 38.1cpl before processing costs for May.

· At EU level and based on EU Market Observatory data, the butter/ SMP combination is returning 39.2cpl before processing costs with WMP returning 40.1cpl.

Mr Quain said these statistics were just a sample of a raft of market indicators that all pointed in one direction. “Returns have improved considerably and farmers need – and expect - to see these improvements in their May milk cheque, which is a key month in determining dairy farm income for the year”, he stated before going to criticise what he said was a disturbing pattern that had certain Irish Co- ops and processors deliberately lagging their mainland European counterparts in terms of paying the market justified price

“Certain Co- ops and processors have paid up to half a cent below the Ornua Purchasing Price Index for the first four months of the year. The difference between paying 31 cpl and the stated PPI price for just the first four months amounts on a farm that is supplying 350,000 litres in a year amounts to over € 2500. That’s a great deal of money to farmers still looking at a stack of 2016 bills”, he said.

“Irish processors are continuously lagging at the bottom of the milk league and given the investments made at farm level and the huge commitment given by farmers on dairy quality assurance ICMSA finds it incredibly difficult to accept. We need to see our Co- op and processors beginning to move up the milk price league. That process can begin with the announcement shortly of the milk price rise that all the data indicates we have coming. We need it and we expect it”, concluded Mr Quain.