09 Aug 2022

Processors must pay more than 36cpl for July milk

Kilkenny Kilkenny

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Farmer representative organisations are calling for a July milk price of at least 36cpl.
Both the IFA and ICMSA say the price should reflect the marketplace.

IFA National Dairy Chairman Stephen Arthur says that milk processors must pay more than 36cpl for July milk.
The Ornua PPI for July equates to 35.5cpl. However, when the figure is adjusted for the Ornua Value Payment worth 3.22cpl (including VAT), the milk price equivalent is 38.72cpl. A sustained milk price above 36cpl is achievable from the marketplace, and farmers should receive it for the rest of 2021.

Mr Arthur said: “The EU and NZ futures markets have returned price rises in the past week for butter and SMP with the GDT showing increases of 3.8% and 1.5%, respectively in these two key commodities for Ireland.
“Farmers have been faced with a difficult season of poor grass growth and rapidly rising input costs. It’s high time farmers got what the market is returning; we have to balance our books too.”

The call has been echoed by ICMSA.
Based on current markets, the base milk price paid by all processors for July milk must be at least 36.5cpl according to Gerald Quain, Chairperson of ICMSA’s Dairy Committee.
Mr Quain said that processors must stop holding back on the milk price paid to their supplier-farmers, many of whom are experiencing substantial cost increases on inputs often purchased from the same milk processor.

“The facts speak for themselves: the base Ornua PPI is at 35.5cpl for July milk and with an additional €10.05 m paid to processors on top of this, and dairy markets broadly stable, farmers are fully entitled to expect a base price of 36.5cpl for the milk supplied in July. We think that is entirely reasonable and does not even take into account the demonstrable fact that milk processors have been holding back on milk price for a number of months and increasing their own profits at the expenses of their suppliers”, said the ICMSA spokesperson.

Mr Quain noted that for June milk, no less than nine milk processors failed to even pay the equivalent of the base Ornua PPI, while five processors were only marginally ahead of it.
“We want Co-op boards to insist that management pay out in full the market return, including the Ornua Value Payment. It’s time – and past time – that farmers got their fair share of strong dairy markets,” said Mr. Quain.

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