30 Nov 2021

Limerick farming: Price pressure rises on milk processors 

Limerick farming: Price pressure rises on milk processors 

Gerald Quain of the ICMSA

LIMERICK’S chair of the ICMSA dairy committee, Gerald Quain, believes there is scope for at least a single cent per litre increase in base price from most co-ops.

The Creggane-Colmanswell man was speaking in advance of milk price announcements for June.

“There must be more from those co-ops who failed to increase price for May supplies,” said Mr Quain, who cited the latest Ornua PPI which shows an increase in the base index of over 1cpl.

“Let’s talk about what we know for a fact: there was already a price gap of 1.5cpl between top and bottom base milk that left really substantial differences in milk cheques between neighbours last month.

“That has to be bridged and it had better be closed by those at the bottom coming up. It cannot be the case that farmers in certain co-ops do not benefit fairly and proportionately from milk price increase,” said Mr Quain.

He said the ICMSA sees no reason “whatsoever” for any co-op to pay less than 36.5cpl base price for all June milk.

“We’re supported in that by the Ornua price of 35.9 cpl indicative price. Returns from across the globe remain strong in what has been a solid year for dairy product demand with SMP price up over 20% year on year and butter increasing over 25% in the same timeframe.

“Farmers will not accept any repeat of the old discredited tactic of ‘low and slow’ price rises during peak production and they most certainly will not entertain excuses about events of four days ago when positive movements of four weeks ago have still not been fed through to their milk price,” said Mr Quain.

IFA dairy chairman Stephen Arthur said it’s about time processors paid a milk price that reflects what the market is returning.

He said the Ornua Purchase Price Index (PPI) for June has risen by over three points to 119.9.

“When adjusted to include the Ornua Value Payment, the IFA adjusted PPI indicates an equivalent farmgate price of 38.11cpl. However, farmgate milk prices continue to lag substantially behind this.

“In the past 12 months, the Ornua PPI has only dropped once, with 11 months showing gains in market returns. Since the start of 2021, the adjusted Ornua PPI has risen from 33.88 cpl in January to 38.11 in June.

“While the PPI continues to return solid milk prices, the processors are reluctant to pass it back to farmers. It’s about time the processors reflected what the market is paying,” said Mr Arthur.

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