The Irish Creamery Milk Suppliers’ Association (ICMSA) has called on processors to increase milk prices for December’s supplies to 37.1c/l excluding VAT amid improving global dairy markets and the threat of tight supplies in 2024.

ICMSA dairy committee chair Noel Murphy stated that co-ops “can and should” pay 37.1c/l in light of many farmers deciding to dry off cows early, with margins too slim to justify milking on.

Increased prices must come for December’s milk, even though the month sees low volumes of deliveries, as co-ops must endeavour to pay the highest price possible to suppliers, Murphy commented.

“There is no doubt that 39c/l [37.1c/l excluding VAT] is an absolutely realistic price for co-ops to reach for December payments and the markets for the last quarter of 2023 prove as much,” the dairy chair said.

“Milk supplies are tight in exporting nations and if farmers are to be encouraged to produce long term, in the volumes that the co-ops already know they will require, then prices that reflect a rising global market and demand have to be paid to the primary producers.”

Murphy warned co-ops that leaving farmers short on prices now could be a move they will “profoundly regret” later in the year if farmers decide that the margins aren’t there to keep up output.

Positive sentiment globally

Farmers here would need 40c/l excluding VAT to be on par with milk prices paid on the continent, according to Murphy.

The Global Dairy Trade (GDT) is up over 20% since the auction’s lowest point and EU butter prices have rebounded over the same period, he stated.

“It’s up to the co-ops to recognise those signals and act on them. That needs to start this moth and it needs to start by a decision to pay at least 39c/l for the milk supplied in December.”

Murphy added that processors must be “bold and begin restoring the farmer confidence that has been so badly shaken” by 18 months of tight margins and a “really damaging cave-in” by Government to "anti-dairy policies".