Irish co-ops are continually paying a lower price to their milk suppliers than their European counterparts, Gerald Quian chair of ICMSA’s dairy committee has said.

“Figures from the Dutch Dairy Board show that Irish processors were over €3.40 per 100kg below the European average for the rolling 12 month average up to January 2017.

“The average milk price paid across Europe in those 12 months was €28.41 per 100kg with the three Irish processors listed paying out well below that at an average of €24.30 (excluding VAT), based on 4.2% fat and 3.4% protein.”

“Even more alarming is the fact that Irish processors are also well below New Zealand at €29.28 and the US at €34.64 per 100kg for the rolling 12 month period. The gap that has developed is now inexcusable and must be closed.”

Global demand still on the up

Quian called for a February milk price of at least 32c/l, saying it would be “fully justified and based comfortably on market returns”.

“The Ornua Purchasing Price Index returns for February 2017 remained fixed at 105.4 ,or 31.4c/l, but this is based on a processing cost of 6.5c/l which we’ve always felt is overly generous to the processors.”

“Despite the reductions in the GDT (Global Dairy Trade Auctions) in the last month, global demand for dairy products continues to grow at 1.5-2% per annum and global milk supplies in January 2017 have started 1.7% below January 2016 levels, with milk supplies lower in all the major exporting regions apart from the USA.”

February milk price

The dairy chair added that the decision by Glanbia not to increase the milk price was disappointing and at variance with demonstrable market returns at this time.

“It is simply a fact that the market is simply returning a better milk price than 31c/l.”

On Monday the board of Glanbia kept the February milk price unchanged at 29.3c/l (excluding VAT), at 3.6% fat and 3.3% protein.

Lakeland also held its milk price at 29.7c/l (excluding VAT).

Meanwhile Carbery Group increased milk price for February by 1.5c/l and it is now up to the four co-ops within Carbery (Lisavaird, Drinagh, Barryroe and Bandon) whether they follow suit.

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Global milk supply picking up