Milk prices at 1995 levels, claim farmers
The Irish Farmers Association (IFA) has claimed that recent cuts to milk prices mean they are now at ‘1995 levels’ and that dairy processors have some serious questions to answer.
Farming organisations have reacted angrily to the cut in March milk prices by both Glanbia and Lakeland Dairies last Friday.
Glanbia said it was paying 30.5c/L (VAT inc), down 1c/L, while Lakeland Dairies announced a price of 31.56c/L (VAT and lactose bonus included) for March supplies.
“Bearing in mind that many industry spokespeople predicted only a couple of months ago that 2019 milk prices would be about on par with last year’s, co-ops owe it to their suppliers to signal that this is the end of milk price cuts for 2019. Farmers need every cent as peak approaches to clear their massively increased 2018 bills,” IFA National Dairy Chairman Tom Phelan said.
“Farmers legitimately ask: when all this investment has been made on farms and in industry to generate value, when a national food sustainability strategy has been developed and farmers are delivering on it, how come we still, this month, are looking at a 1995 milk price?”
“Our industry must do better. But right now, they must clearly state to dairy farmers that they have seen the end of milk price cuts for 2019,” he said.
ICMSA’s Dairy Committee Chairperson, Gerald Quain, said that farmers were entitled to be both cynical and very angry about milk price given the decision of two of the states biggest milk processors to cut their milk price.
“The plain fact is that Irish Co-ops have been lagging near the bottom of the European milk price table for a very considerable time and they are already underpaying on any kind of ‘like-for-like’ comparison with their European counterparts.
“So ICMSA will not accept the idea that a fall in the Ornua PPI immediately translates back into a cut in farmer price. The Co-ops will have to explain why increases in the Index rarely seem to benefit farmers immediately but falls seem to be passed back to farmer milk price instantly”, said Mr. Quain.
The move by two of the country’s largest processors comes as milk production is on target to top 8bn litres this year, with deliveries to some producers up 12-13pc in the first quarter compared to the first quarter of 2018.
Glanbia said its March price is “in line with current market returns”.
“While global milk supply growth is lower than previous years and oil prices have increased, market demand in some regions is being adversely affected by challenges that include lower economic growth, Brexit and trade wars,” Glanbia chairman Martin Keane said.