The ICMSA and IFA have slammed Dairygold’s decision to cut its August milk price by 2.85c/l, excluding VAT.

The Dairygold board has reduced the August quoted milk price to 42.81c/l excluding VAT, inclusive of sustainability and quality payments.

The price cut is “unjustified and unwarranted”, said ICMSA dairy chair Noel Murphy.

IFA dairy chair Martin McElearney said the move left farmers frustrated and angry.

Dairygold chair Pat Clancy said that there has been “a dramatic deterioration” in global dairy prices over the last three to four weeks.

“Increased global milk supply and weaker consumer sentiment have seen key Dairygold products, especially butter and cheese, fall by well over 3c/l.

Market returns

“The speed, timing and extent of the market falls is challenging, as they emerge after the peak processing period, with seasonally higher stock levels exposed to these declining market returns.

“There is evidence in the marketplace of inventory being off-loaded, putting further pressure on returns,” Clancy said.

A group of Dairygold suppliers plans to meet at the co-op’s HQ in Mitchelstown at 12pm on Friday, where it will present a letter calling for the resignation of the board of directors.

EU dairy commodity prices, particularly butter and cheese, have dropped sharply

Meanwhile, Kerry reduced its milk price by 1.5c/l on Tuesday to 45.22c/l, excluding VAT, but inclusive of quality and sustainability bonuses. The base price for the month is 43.86c/l, excluding VAT.

“EU dairy commodity prices, particularly butter and cheese, have dropped sharply,” a Kerry spokesperson said.

“The decline is driven by strong milk production across key exporting countries and weaker demand.

“Prices are likely to remain under pressure in the near term unless demand improves.”

Lakeland Dairies moved last week to cut its base price to 44.48c/l, excluding VAT. The price in Northern Ireland fell to 38.3p/l, including a sustainability payment.