'At least a 1c/L price increase is fully justified on January milk'
Ornua has announced a 1.6 point increase in its Product Purchasing Index to 105.4 points, which it stays is equivalent to a milk price of 29.8c/l + VAT (31.4c/l including VAT),
IFA National Dairy Committee Chairman Sean O’Leary said the announcement bears out IFA’s view that at least 1c/L price increase is fully justified on January milk.
He added that lower payers, including Kerry, need to aim higher than 1c/L to be fair to their suppliers.
“Most co-op boards will be meeting this week and next, to examine milk prices payable for January.
"They must make sure the new increased 5.4% VAT rate benefits the farmers fully, and pass back a fully justified increase of at least 1c/l – more for the lower payers including Kerry – back to support their milk suppliers’ essential income recovery before peak,” Mr O’Leary said.
O'Leary said this week's 1.3% GDT price increase belied the slight easing in spots and futures of recent days.
"This is because buyers realise that the global milk production scarcity which has been developing for months is now compounded by the Northern Hemisphere only starting to creep up towards peak, and Oceania’s output rapidly falling seasonally,” he said.
“EU market returns throughout December and January have exceeded 37c/l gross (equivalent to a farm gate price of 32c/l + VAT). Irish SMP prices have caught up with EU averages in January, with butter now even exceeding that figure,” he said.