All co-ops and milk purchasers should bring base milk price up to 50c/l for March supplies according to Irish Creamery and Milk Suppliers Association (ICMSA) dairy committee chair Noel Murphy.

Speaking in advance of the imminent March milk price announcements from co-ops, Murphy said that the price is “fully justified” by market returns while also being required to deal with surging input costs.

He said that 2022 has so far seen unprecedented rises in all commodities and milk products on wholesale markets were no different.

“The most recent Dutch dairy quotes showed the industry standard butter/SMP (skimmed milk powder) mix increased by 2.5c/l in just one week while WMP (whole milk powder) stayed steady at almost 63c/l using an 8cpl processing cost.

“The butter/SMP combination returned over 65c/l using the same metrics,” he said.

On average, 60% of direct costs on a dairy farm are attributed to feed and fertiliser

He said that the unparalleled rises are having knock-on effects for both dairy farmers in terms of costs of production and the co-ops in terms of processing costs, so it is no surprise, he added, that dairy farmers fully expect to see significant price rises for the milk they supplied in March.

“On average, 60% of direct costs on a dairy farm are attributed to feed and fertiliser and the official statistics from the CSO released recently show that energy costs increased 32%, straight fertiliser is up 170% and feed stuffs are up 18%.

The increase in fertiliser prices alone could add an extra 5c/l to the cost of production

Murphy said that “the disturbing part” of these statistics is that they are the annual increase from January 2021 to January 2022 with the increases in February and March yet to be included.

The increase in fertiliser prices alone could add an extra 5c/l to the cost of production and much of that fertiliser is used in the present months with payment being requested earlier this year than other years resulting in additional financial pressures for dairy farmers.

“Farmers cannot be fobbed-off with a token 1c/l increase for March milk, the markets are returning prices well past 50c/l and farmers are absolutely entitled to see their milk price hit that figure 50c/l for March milk.

“Co-op boards need to recognise reality and realise that everyone else can see the real situation also,” concluded Murphy.