It is important that processors increase the milk price returned to suppliers and at the very least reflect Ornua returns, IFA dairy chair Tom Phelan has said.

On Wednesday, the Ornua purchase price index (PPI) held steady for December, equating to a milk price of 31.22c/l, excluding VAT, once processing costs were included.

Phelan said that IFA analysis shows a very stable European market, with positive indications on the global front for increases in commodity prices, as farmers face into months when cashflow is extremely tight.

He said the first Global Dairy Trade (GDT) of 2021 has yielded significant gains in commodity prices, surpassing European quotations for butter, cheddar and skimmed milk powder by €200 to €400.

Market prices

Though no Irish dairy produce is traded through this auction, it does indicate the performance of dairy produced in the southern hemisphere, he said.

“Given that milk production in New Zealand contracted in November and that Fonterra has forward sold a significant proportion of their produce, this could be an early sign of tightening supplies.

“This could in turn improve market prices,” Phelan said.

“Almost all the major milk processors fell short of offering a milk price reflective of the PPI last month,” Phelan said, calling for them to increase the price for December.

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