Farm Ireland

Saturday 17 March 2018

IDB 'inaction' causing woe for farmers: ICMSA

Darragh McCullough

Darragh McCullough

Surging dairy markets have led to farm organisations calling for an end to what they called the "outrageously unjust" milk prices being paid by Irish processors.

Whole milk powder (WMP) prices have doubled since last July on Fonterra's Global Dairy Trade (GDT) auction, while Dutch auction WMP prices are also up by €100/t.

The GDT recorded a 15pc increase last week, its biggest ever since trading started nearly five years ago.

A deepening drought in New Zealand, combined with tightening supplies in the US and cold-hit EU countries have seen world auction prices overtake European prices in dairy commodity markets.

However, sources close to the Irish Diary Board (IDB) suggest that they are not planning to announce any increase in prices in the coming weeks.

This has sparked an angry reaction from the ICMSA, with dairy chairman Pat McCormack claiming that the IDB's "inaction is now compounding an unprecedented financial crisis on many family farms".

In response to the criticism, the IDB said that their index consistently reflected the market.

"Some of the produce we sell is forward contracted while a substantial amount is consumer product which is slower to move in either direction.

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"Obviously we (are seeking) to exploit increases that are taking place as a consequence of adverse weather conditions in both the Northern and Southern Hemisphere today," a spokesperson said.

The IFA said that in the absence of any superlevy risk this year, co-ops should be paying 34c/l plus VAT for March milk to encourage Irish farmers to maintain supplies.

However, over 1,000 Glanbia suppliers who signed up approximately 120m litres of milk to their processor's forward priced contracts are set to receive a 1.3c/l top-up this week.


It comes as part of the deal that stipulated that any increase in input costs recorded by the CSO would be covered by the processor in a subsequent top-up.

The bonus comes as Glanbia Ingredients Ireland (GII) gears up to turn the first sod at its Belview site in the next three weeks, according to GII CEO, Jim Bergin. The new joint venture boss told delegates at an Agricultural Science Association conference in Horse and Jockey last week that GII was working through the final stages of approval with Government agencies on the €180m project at Waterford Harbour.

The company has also begun advertising for a raft of roles in IT, engineering, quality control and process engineering.

It expects to employ 70 long-term and around 250 others during the construction phase of the Belview facility.

Mr Bergin said that GII would be the third biggest Irish-owned exporter when it is fully operational.

Irish Independent