Farm Ireland

Saturday 21 April 2018

Kerry hold milk price at 30c/l

ICMSA's Pat McCormack
ICMSA's Pat McCormack
Declan O'Brien

Declan O'Brien

Kerry Group helped keep €8m in dairy farmers' pockets this week after the company agreed to hold its April milk price at 30c/l (including VAT).

Kerry's move puts increased pressure on the other main processors to hold prices despite continuing difficulties on international dairy markets.

Lakeland's board are due to meet today to set its April milk price, while the boards of Dairygold, Aurivo and Arrabawn are expected to meet over the coming week.

Last month Glanbia Ingredients Ireland confirmed that it had cut its base to 29.5c/l for March but Glanbia Co-op committed to supporting the business's milk price at 30.5c/l for April and May.

It had been feared that milk prices for April would fall by 1c/l at least. Since around 14pc of annual supply, or close to 800m litres, is produced during April, every 1c/l is worth close to €8m to dairy farmers.

The welcome news for farmers comes against a background of continued uncertainty in world dairy markets. Ornua's purchase price index (PPI) for April was down a single point to 98.9. However, the Global Dairy Trade internet auction saw its index drop 3.5pc to 730, the lowest level since 2009.

Despite weakening market sentiment, both the ICMSA and IFA called on dairy processors to hold their milk prices for April.

"Ornua's index at 98.9 only fell slightly on the March level and it's very striking to note that in April 2012, when the index was below this level, Irish processors on average returned a milk price to farmers of 31.5c/l," Pat McCormack of the ICMSA said. .

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"Considering the massive investments made by our processors in improved facilities to deliver higher value-added and by Ornua in marketing initiatives and routes to market, farmers rightly expect that milk price now being returned to them should not be a commodity price but a price based on the value-added products that our processors are now producing," he added.

Meanwhile, Sean O'Leary of IFA called on processors to support milk price at current levels for April and through the peak. He pointed out that EU dairy commodity markets were still returning 34c/l before processing costs.

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