Dairy Ireland calling on co-ops to set milk prices each quarter
Dairy Ireland has called on co-ops to switch from paying farmers a monthly milk price to setting milk prices just four times a year.
The move would help dairy farmers by enabling better cash-flow planning and free up time at monthly co-op board meetings to allow members to focus on strategy discussions, according to Kevin Twomey of Dairy Ireland.
The association, which represents dairy discussion groups, has also urged all co-ops to move to an A + B – C pricing system before the end of 2013 and implement more uniform milk quality penalty and bonus standards.
Mr Twomey said the changes would create a more transparent milk pricing structure for dairy farmers.
He added that farmers needed to focus less on the cents per litre milk price and more on the price they were being paid for kilograms of fat and protein.
"The most recent milk price league showed a 7pc difference between the top and bottom prices paid by individual co-ops.
"But when you look at the breakdown, there was a difference of more than 15pc between the top and bottom protein prices and more than 30pc between top and bottom fat prices," he pointed out.
Dairy Ireland is also keen to discourage milk pricing based on reactive spot market auctions and quotations, such as Fonterra's Global Dairy Trade auction.