Farm Ireland
Independent.ie

Monday 1 May 2017

Dairy farmers demand 30c/L October milk price after latest dairy market surge

ICMSA says the 1c/L milk price rise last month in no way reflected the obvious buoyancy in dairy markets.
ICMSA says the 1c/L milk price rise last month in no way reflected the obvious buoyancy in dairy markets.
Ciaran Moran

Ciaran Moran

Dairy farmers are calling for milk processors to apply significant increases to there milk prices on the back of a recent price surge at the Global Dairy Trade (GDT) auction.

The Chairperson of the ICMSA Dairy Committee, Gerald Quain, said that the relative inaction of processors and Co-ops shown in the face of the hugely strengthened market thus far would have to end for October milk price.

Quain said that based on market returns there was absolutely no reason why milk price could not be set at 30c/L for October.

“Demand for dairy products has now reached a level that has seen a 59% jump in the GDT price index since March 2016 and has almost doubled since its lowest point in August 2015.  

“We won’t accept a repeat of the ‘deafening silence’ from the processors this month and let’s be clear:  the 1c/L price rise last month in no way reflected the obvious buoyancy in markets.

“This kind of minimal ‘inching-upwards’ price rises are very frustrating for suppliers in the context of the kind of cash-flow pressures that milk suppliers are experiencing this Autumn after what has been a basically horrific year for dairy farmers.

“The maths breakdown of the situation at the moment gives farmers a milk price of 30 cents per litre and that’s what the board members should be demanding from their Co-op”, said Quain.

New Zealand's 'Big Wet' boosts dairy trade

At yesterday's GDT auction key Whole Milk Powder prices surged 19.8% (the sixth largest rise in auction history).

Other price rises were more modest, with SMP and butter, for example, lifting 6.5% and 4.0%, respectively.

According to Nathan Penney, Economist with ASB bank in New Zealand, the price surge follows a rapid decline in NZ production on the back of very wet weather.

“Fonterra has reported that late October milk volumes in the key Waikato region have been down around 14% vs. the same time last season.

“Fonterra also followed that announcement by lowering its milk collections forecast to 7% below last season (from a 3% fall previously).

“This is in line with our forecast drop of 5% nationwide across all suppliers (note Fonterra continues to lose milk supply share),” he said.

Online Editors