The “over-pessimistic” outlook on milk price being advanced has been queried by the Irish Creamery Milk Suppliers’ Association (ICMSA) – with farmers reeling from price cuts in March.
ICMSA Dairy Committee chairman Ger Quain said:
“We’re not denying that dairy products have taken a hit from Covid-19, with some more impacted than others.
“But it’s also true that the market has shown signs of stability in recent weeks and the milk price announcements by Arla Denmark and Friesland Campina that their May milk price will be 32.46c/kg and 31.83c/kg – based on 4.2% fat, 3.4% protein – is certainly encouraging given that these companies operate in similar markets to Irish processors,” he added.
In the context where an average milk price of 33.26c/kg was paid across the EU for March milk and where Irish processors are already near the bottom of the price league, Irish farmer-suppliers will simply not accept another cut as savage as that imposed by some processors imposed for March.
“It’s worth noting that the reduction in milk price for March in Ireland was the most severe across the EU,” Quain highlighted.
“The 2c/L cut for March milk will see close to €15 million taken out of Irish dairy farmer pockets – and that’s before before April milk price is announced.
The chairman broke this down, noting:
An average supplier will lose €9,000 in revenue from March to year-end on this milk price reduction alone.
Quain said, when setting milk price, co-op boards will need to recognise the pressures on farmers and look “inside their own gate for savings”.
“If similar co-ops across the EU can deliver a milk price for May north of 30c/L, then our own processors need to be at, or close to, this level.
If they’re not, then serious questions need to be asked by the boards.
“We are in a difficult period but there are signs of stability and co-ops must see that – and deliver the strongest milk price possible for April given its importance to the rest of the year,” Quain concluded.