Farm Ireland

Saturday 20 January 2018

Farm leaders demand 2c/l rise for May milk prices

Farming Independent Team

A 2C/L lift in milk prices for May is being sought by farm leaders in the wake of the recent lift in dairy markets.

Both the ICMSA and IFA have urged processors to move to a base of 33c (including VAT) as demand on European and global dairy markets continues to improve.

Sean O’Leary of the IFA said higher EU average market prices, five consecutive bullish GDT auctions, rising spots and futures have all created the conditions to allow for a May milk price lift of up to 2c/l for Irish farmers.

With most processors currently quoting a base price of 31c/l, this would mean moving to 33c/l.

This view was echoed by ICMSA. The organisation pointed out that the Dutch spot market price for butter had increased by €300/t over the past week and now stood at €5,370/t. Quotes for skim milk powder (SMP) were also improved, increasing to €1,970/t.

However, Dairygold’s Jim Woulfe warned that the dairy sector was recovering after a difficult two years.

While he welcomed the recent improvement in global dairy markets, the Dairygold CEO said the whole processing industry had been “very supportive” of suppliers over the past two years.

“We see very fancy prices on the spot market but try and get a contract at those prices and you won’t get it,” he said.

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But both the IFA and ICMSA insisted that a base of 33c/l was justified.

Mr O’Leary said the latest data from the EU Milk Market Observatory showed that butter prices had increased by €210/t up to the last week in May, while SMP increased €100/t in the last month to €1,850/t, with cheddar up €130/t in the last two months.

He claimed the combined value of these returns for an Irish product mix equated to a farm-gate price of 34.7c/l (including VAT).

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