ICMSA welcome milk price rises and predict further rises to ‘cusp of peak-production’

ICMSA Dairy Chairperson, Ger Quain, said that his organisation has already predicted a series of prices rises through Q1 and certainly up to the cusp of peak-production: “We’re satisfied that the Co-ops have now accepted that it is no longer feasible to deny the market reality that is evident to all. The problem is – and will be – their tendency to feed market price rises back to their farmer-suppliers on their traditional ‘ low and slow’ basis. That’s the reason why even after this round of price rises -that we would argue could have been begun last November - we’re still short of the price-per-litre that the Ornua Index is giving. Aside from the actual price farmers are receiving and how that is being calculated, it’s worth noting how the treatment and perception of the Ornua Index has changed as communicated by the Co-ops: it was presented to farmers originally as the price that they (the Co-ops) had already received and therefore the most accurate guide to what the farmers should be receiving. It’s interesting – and very irritating – for farmers to see how that concept has now been changed to one where the price-per-litre given by Ornua Index is to be interpreted as an aspiration; something that the Co-ops should aim for ‘if God is good’. In terms of the key determinants, the supply-demand dynamic and current weather patterns, the outlook for milk price is positive. It’s always worth remembering – as our Co-ops give themselves a clap on the back for finally raising milk price to the level it should have been at two or three months ago – that Ireland’s biggest three processors occupy the bottom three positions in the milk price league table of EU processors. This isn’t a sustainable position and it needs to change in 2020”, said Mr Quain.