Milk price unchanged but co-ops warn of sluggish global demand
DAIRY processors have been accused of paying below-market returns for milk, even though most co-ops announced unchanged prices for June.
ICMSA dairy chairperson Gerald Quain said the milk price being paid to dairy farmers remained behind market returns and co-ops needed to increase milk farmer returns to at least reflect the Ornua PPI.
"Every 1c below market returns represents a loss of €80m in a full year and this is €80m taken out of the rural economy and put simply, dairy farmers must get what the market is returning," he said.
With the Ornua PPI for June at 31.6c/l, it is clear that milk price has lagged behind market returns during our peak production period, said Mr Quain.
"June milk prices are still behind the PPI and it has become a pattern that is simply unacceptable.
"We can't have a situation where market returns are being withheld from dairy farmers during the peak production months."
Mr Quain claimed that Irish processors, were €1.5/100kg below the rolling 12-month average milk price which amounts to €120m if this difference was eliminated.
Kerry Group announced that its base price for June milk supplies remained unchanged at 30.5c/l (VAT inclusive).
A spokesperson said that based on average June milk solids, the price return inclusive of VAT and bonuses was 33.114c/l.
Glanbia announced last week that it will pay 30.5c/l (VAT inclusive) for June manufacturing milk supplies.
This is unchanged from the May price.
The Glanbia price includes 30c/l (VAT inclusive) from Glanbia Ireland, in addition to a 0.5c/l top-up from Glanbia Co-op.
However, Glanbia chairman, Martin Keane, warned milk suppliers that returns from the market were below the current farm gate price being paid by the processor.
The board of Lakeland Dairies also warned of market pressures, saying the demand for butter remained slow and prices were at a four-year low.
"While supply in many of the large milk production regions remains subdued, there continues to be weakness in the global dairy markets," Lakelands stated.
"In particular, butter prices are under increasingly downward pressure," it added.
Lakeland Dairies confirmed that it will pay 31.28c/l (including VAT) to suppliers in the Republic of Ireland, and in Northern Ireland it will pay 25.25p/l for June milk deliveries.
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