IFA National Dairy Chairman Sean O’Leary has said that, assuming that all co-ops increase their May milk price by 1c/l including VAT, many would have a way to go to catch up with the 30.78c/l + VAT average indicated by an update to the April Farmers Journal league to take account of the assumed increase (see graph below).
Mr O’Leary urged all co-ops to aim to beat the average in their June milk price decisions so that Irish farmers can get to clear outstanding debts and improve their still fragile cash flow and financial positions over the peak production period.
“Quite apart from the disparities that clearly apply at home, it seems Irish co-ops are not comparing favourably within the EU. According to the LTO April league, at just over 31c/kg (32c/l), the average of the three Irish co-ops it monitors (Kerry, Glanbia and Dairygold) is 2c/kg (just over 2c/l) below the 33c/kg league average,” Mr O’Leary said.
“Commodity prices are continuing to strengthen, and spot German, Dutch and French quotes for butter have reached €5,600 while SMP spot quotes exceed €2,000/t. Spot quotes are indicative of trends, and not necessarily representative of what co-ops are achieving on the marketplace. However, these prices are equivalent to a gross return of 42.8c/l before processing costs,” he said.
“We urge all co-op board members to focus on these factors when they decide on June prices in the coming weeks,” Sean O’Leary concluded.