IFA calls for milk price increase as Ornua cuts PPI

File photo
File photo
Margaret Donnelly

Margaret Donnelly

IFA National Dairy Chairman Tom Phelan said the June PPI reduction of 1.6 points announced today by Ornua, which is equivalent to a milk price of 29.98c/L before VAT (31.6c/L incl VAT), still leaves room for the majority of co-ops to increase their June milk price by 1c/L.

Ornua announced today that its Index for June 2019 is 105.7 (31.6c/L, VAT inclusive, based on Ornua’s product purchase mix and assumed costs of 6.5c/L) and is adjusted from 107.3 in May 2019.

The adjustment for June reflects lower butter prices off-setting higher powder prices and flat returns for cheese, it said in a statement today.

“Apart from the West Cork Co-ops, all milk purchasing co-ops have undershot the Ornua PPI in the milk price they have returned to farmers for most of the last seven months,” Mr Phelan said.

“Global milk supplies are not growing at the moment, and are falling dramatically in some of the main regions, such as New Zealand, the US, Australia and Argentina. Also, intervention stocks of SMP are now totally empty,” he said.

“Demand is relatively good in Asia, South America, the EU and the US,” he added.

“Concerns over the potential impact of economic and geopolitical factors that have yet to materialise is not a good enough reason to deny Irish farmers for several months a milk price fully justified by market returns,” he said.

“Co-ops will be meeting from this week to decide on their June milk price, and I maintain that most of them should increase their price by at least 1c/L, in fairness to their suppliers."

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