Co-ops should be in a position to pay a year-end bonus to farmer suppliers based on market returns and the milk price delivered to farmers over 2020, the Irish Creamery and Milk Suppliers Association (ICMSA) dairy committee has said.

Boards will be meeting shortly to set December prices and ICSMA dairy chair Ger Quain said a top-up payment for all milk supplied last year should be considered.

He said while processors had faced a challenging year due to COVID-19 and Brexit uncertainty, significant market returns had still been achieved.

A bonus payment would be justified as a proportionate share of co-op profits and in recognition of farmers’ contribution during the pandemic.

Markets had shown considerable improvement post-lockdown in April, Quain said.

Objections by the ICMSA that March and April milk price cuts were premature had been “completely vindicated” he said.

Markets

He noted that the cuts could be attributed to concerns over disruption and a fall in demand caused by COVID-19, making them a pre-emptive short-term measure to protect the business.

He felt the same caution was still applied in the latter part of 2020 due to the possibility of a no-deal Brexit.

Co-ops were now in a position to confirm a reasonable continuation of British business, according to Quain, and it seemed fair to ask boards to include a market-based top-up payment for all milk supplied in 2020.

Quain said that no-one could seriously dispute that market returns were better than anticipated and that fact should be recognised in the form of a year-end bonus to be paid to milk suppliers.

Analysing milk price differences

How base milk price compares

Co-ops should make year-end milk price bonus payment - ICMSA

While processors had faced a challenging year due to COVID-19 and Brexit uncertainty, significant market returns had still been achieved, the ICMSA has said.