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The co-op boards who will set August milk price in the coming days have been called on by IFA dairy chair Tom Phelan not to follow Glanbia in cutting the price below the Ornua PPI.
Glanbia cut its August price by 1c/l to 27.04c/l excluding VAT, which was the second cut in as many months.
Phelan said this was a major blow to the cashflow and confidence of Glanbia suppliers.
'Disappointing'
Lakeland Dairies also cut its price by 0.75c/l to 28.5c/l following a 0.5c/l cut in July.
Phelan said while it was less severe, it was also disappointing.
Phelan pointed to the August Ornua PPI, which stands at 29.22c/l excluding VAT.
“The EU Commission’s Milk Market Observatory tells us that EU average milk prices for July 2019 were up 6% compared to the same month last year, but Irish milk prices were down 2% - only Denmark and Greece performed worse,” he said.
Europe
Phelan explained that Friesland Campina in the Netherlands has held a milk price equivalent to 30c/l excluding VAT at 3.3% protein and 3.6% butterfat for July, August and into September.
Arla in the UK has held its price for the last eight months at 30.22ppl (33.8c/l).
“The market returns determining those price decisions are the very same markets our co-ops compete on, so why so poor a price performance from Irish co-ops?” he asked.
In the monthly milk price review of European milk purchasers, Glanbia, Kerry and Dairygold have all fallen below the average price.
In July, Phelan said they stood just over 3c/l behind and Glanbia’s cut would put them just under 5c/l below the average.
Decisions
He said: “This is simply unfair: the Ornua PPI return would allow Glanbia to pay over 2c/l more than they are, and European indicators are 2c/l to 3c/l per litre above the Glanbia price.”
Phelan called on board members to show independence and objectivity in deciding their August milk price and to use the facts of the market.
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