Farm Ireland

Tuesday 20 February 2018

Pressure mounts on co-ops to match 34c/l milk price

IFA welcomes increase for June

Darragh McCullough and Caitriona Murphy

Pressure is mounting on co-op boards across the country to match the 34c/l VAT inclusive milk price set for June by Kerry, Glanbia and Town of Monaghan.

Kerry ratcheted up the pressure even further yesterday afternoon by announcing that it would also pay farmers an additional 1c/l, backdated, for April and May milk supplies.

Town of Monaghan also increased its price by 1c/l last week, bringing it to 34c/l for June.

A spokesman for Kerry said that its milk price increase from 33c/l to 34c/l for June, and the backdated 1c/l for April and May, were agreed after a review of its contracts.


"The Group has secured its market position for the majority of this year's production and revised the milk price accordingly," he said.

Glanbia announced on Friday that it would increase the June manufacturing milk price by 1c/l to 34c/l including VAT.

The Kerry and Glanbia moves will put dairy co-ops across the country under pressure to follow suit when their boards meet this week to set milk prices for one of the key milk supply months of the year.

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There has been some suggestion from the co-ops that a price increase would only exacerbate the already precarious national superlevy situation.

However, the IFA's Kevin Kiersey said the majority of farmers who were staying within quota should not be penalised by the co-ops for this.

"The moves by Kerry, Glanbia and Town of Monaghan show that we are right in our contention that there is room for a small increase in the price paid to farmers and we hope the other co-ops will move in the same direction," he said.

Co-op boards have been urged to ignore the Irish Dairy Board's (IDB) decision not to increase prices for June supplies. The IDB decision to hold tough follows May price cuts, despite strong international prices for key dairy commodities such as butter.


"At the very least, the IDB reduction in the butter and skim milk powder price imposed in May should be reversed," said the ICMSA's Pat McCormack.

"The price of butter in June has increased by €390/t in the UK market and by €280/t in the EU market, so farmers simply cannot understand why the price of Irish butter has not increased.

"It is quite clear that the market for butter in May and June improved and this must be reflected in the prices farmers receive for milk delivered in June."

Meanwhile, the latest statistics from the Central Statistics Office show that both cheese and butter production was significantly up last year compared with 2009.

Cheese production increased by 5.5pc to 172,000t last year, of which 163,000t was exported. Butter production increased even more to 9.5pc last year, bringing butter exports to 136,000t. However, liquid milk and buttermilk production was down marginally by 0.4pc.

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