"The co-ops must accept that the dairy market recovery is a reality and start increasing milk prices," IFA president Joe Healy has said.
Launching the IFA autumn milk price increase campaign, Healy said dairy farmers are under extreme cashflow pressures after the prolonged market downturn.
EU returns for the main commodities in the Irish product mix have now improved by almost 5c/l, according to the EU Commission’s Milk Market Observatory, giving a gross return of 29.85c/l before processing costs at the end of July. Assuming 5c/l for processing costs, this would allow for a farmgate price of 24.85c/l plus VAT or 26.1c/l including VAT. The latest GDT auction has confirmed this positive trend with prices up 6.6%.
EU commodity prices have increased strongly since May with butter up €590/t or 24%, SMP up 6.2%, WMP up 15.5%, Cheddar up 9.1% and Whey up 28%.
It is now quite clear that the tide has turned on dairy markets and that we are looking at a recovery
IFA dairy chair Sean O’Leary said: “Dairy farmers will be assessing their options for the autumn very carefully ahead of the September application deadline for the EU 14c/l milk supply reduction scheme, which was announced by Commissioner Hogan at the July Farm Council meeting”.
O’Leary said, “It is now quite clear that the tide has turned on dairy markets and that we are looking at a recovery. With the dire cashflow shortage on farms and prices below the cost of production, farmers will need every extra cent from the market returned by co-ops to help pay bills and rebuild badly shaken confidence.”