Basis for milk price reductions ‘completely gone at this stage’ – Farm groups

Ciaran Moran

Ciaran Moran

Boosted by the poor weather conditions in Europe this spring, dairy markets are continuing to improve and should translate into positive returns to dairy farmers in the coming months, according to ICMSA Dairy Chairman, Mr. Gerald Quain.

“We think the increased demand for SMP from Intervention and the lack of any negative impact on price is quite significant.  

“We expect that the positive market sentiment will continue and we can’t see any reason why dairy farmers cannot receive better prices in the next number of months to make up for the very expensive spring period.

“The speculation that the European Commission is ready to move to two sales of SMP each month show the renewed interest and demand within the market for dairy products resulting from spring peak failing to hit the production highs expected,” he said.

He also said that Dutch Dairy Quotes spot prices continued to improve last week with the butter/SMP mix returning 37.2cpl after processing and including VAT, while WMP returned 32.1cpl using the same format with butter prices in particular moving ahead in the last number of weeks.  

“The next round of Co-op price announcements need to signal a movement towards positive steps on milk price and the basis for reductions is completely gone at this stage”, said Mr. Quain.

IFA National Dairy Chairman Tom Phelan said co-op boards, meeting within the next week to consider May milk prices, must leverage the improved market returns of the last number of weeks to ensure that, at the very minimum, that the totality of the April payout - base price plus support - is maintained for May milk supplies. 

Tom Phelan said, “Both Arla and Friesland Campina last week announced June milk price increases.  Arla increased by 1c/kg, which translated into a 1.15ppl increase for UK supplier members, while Friesland Campina upped their ‘guaranteed’ price by 0.25c/kg. FC has stated that it expected European milk purchasers to increase prices further.

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“Market returns have been increasing steadily in the last few months, and now underpin solidly the prices currently being paid by Irish co-ops, with real scope for improvements.

“Using only the SMP/butter combination, we see that the most recent EU spot quotes and market average reported prices would return between 33.21c/l and 36.31c/l + VAT. 

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