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Milk production up 2.1% in March as co-ops warned farmers shouldn't be asked to take all the pain of poor markets

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Cows are milked at a dairy farm. REUTERS/Whitney Curtis

Cows are milked at a dairy farm. REUTERS/Whitney Curtis

Cows are milked at a dairy farm. REUTERS/Whitney Curtis

Domestic milk intake by creameries and pasteurisers was estimated at 723.8 million litres for March 2020, according to the CSO. This represents a 2.1pc increase over March 2019.

It comes as IFA National Dairy Committee Chairman Tom Phelan urged co-ops to optimise the April milk price after the severe March cuts, to ensure that farmers are not being asked to take all the pain of challenged dairy markets.

He pointed out that, as the EU has announced an admittedly limited and insufficient APS scheme for butter, SMP and cheese, spot prices for SMP and butter have stabilised in the last two weeks.

“While dairy markets are being seriously challenged by COVID19 and the loss of demand from food services, it is clear that the doomsday predictions of some who said dairy prices would fall to intervention levels are not materialising,” Mr Phelan said.

Phelan also said dairy markets cannot be the only consideration in deciding on milk prices.

"With crude oil prices down 75pc since early January, fuel and energy costs have plummeted for processors. Co-ops have scope to cut costs beyond milk prices and cannot expect farmers to take all the pain,” he said.

“To support farmers’ cash flow during the spring months, in which farmers normally pay merchant credit and other bills, many owed to their own co-ops, board members must not forget the steep price cuts they applied in March, and work to optimise the April milk price,” he said.

EU plans to help the dairy sector weather the coronavirus crisis by storing surplus milk have come under fire from milk producers as prolonging rather than solving the problem.

The European Commission proposed last week financial support for storage costs for milk powder in private facilities in response to the COVID-19 crisis. It also allowed the milk sector collectively to plan production, exempting it from certain competition rules for up to six months.

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