Co-op boards must review their long-term milk pricing plans in the wake of the Irish Farmers Journal/KPMG milk price review, IFA’s dairy chair Sean O’Leary has said.

The review revealed a 6c/l gap between the price paid to milk suppliers in the highest paying and lowest paying co-ops across the country.

This equates to a €300/cow difference in the price paid between the top and bottom co-ops.

A historical examination of the last 13 years shows that gap has been widening massively over the period.

Only some of this differential can be explained by constituent levels and access to alternative income streams to top up milk prices, maintained O’Leary.

“Some co-ops need to up their milk price ambitions a great deal more than others, and this must start with a significant increase in their June 2017 milk price,” he said.

Some co-ops need to up their milk price ambitions a great deal more than others

“I would expect co-op boards to examine the 2016 IFJ/KPMG review at their next meeting to review their long-term milk pricing plan, and for the shorter term to be sure to pass back a price increase of at least 1c/l, which current market returns clearly justify,” he added.

Detailed information

“Farmers value hugely the detailed information provided each year in the Irish Farmers Journal/KPMG Review of creamery milk prices, as well as the additional analysis presented by the Irish Farmers Journal. We fully recognise that the information is provided voluntarily each year by all our milk purchasing co-ops, and commend them for their commitment,” said the dairy chair.

“However, as we have been reminded at the Teagasc open day in Moorepark earlier this week, we must quantify and measure, assess the information and use it to make the required decisions to improve performance, both on farms and within the processing business,” he said.

Product mix

“It is clear that constituent levels do make quite a difference to milk prices, as does the ability of some milk purchasers to utilise alternative income streams to top up dairy market returns.

“However, these cannot possibly account for the totality of the differentials, and it is crucial that milk purchasing co-ops would look at their efficiencies, product mixes, marketing and milk pricing policies.

"It is simply unfair to milk producers who have made commitments through milk supply agreements and have engaged wholeheartedly in the SDAS scheme, regardless of where they are located, to be left with such inequalities of opportunities,” he said.

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Full coverage: Irish Farmers Journal/KPMG milk price review 2017