30c/l minimum price for December
30c/litre plus VAT is the minimum price justified for December milk, IFA dairy chairman Sean O’Leary said this week. Speaking after a meeting of his dairy committee he said that co-ops should be building towards 33c/l before peak.
He pointed to continued firming of EU and global dairy product prices plus falling global milk supplies as reasons for such a price rise.
• The US Dairy Exporter Council calculated global milk supplies to be back by over 2.5% in October
• The EU Milk Market Observatory reports output falling since June and down by 3.6% in October.
“The most recent available EU average dairy product prices for the week ending 1 January suggest returns before processing costs of nearly 38c/l,” he said. “That’s equivalent to a farm gate milk price of up to 33c/l plus VAT.”
“Forward contracts concluded by traders early last year are being rapidly replaced now by higher priced contracts. This will improve the ability and confidence of Irish co-ops to pay further milk price increases, not only on December milk, but also in the months before peak.”
“Despite the last two auctions, in the past 12 months the GDT price for WMP has increased by 49%, SMP by 41%, butter by 30% and Cheddar by 31%.