Co-ops should be paying 50c/L base price for February milk - ICMSA
Dairy farmers should be getting 50c/L base price for February milk supplied to co-ops, the Irish Creamery Milk Suppliers’ Association (ICMSA) said today (Wednesday, March 19).
Noel Murphy, chair of the ICMSA's dairy committee, has also called on co-ops to "focus on holding base milk price".
Murphy has criticised what he has described as the practice of some co-ops of "disassembling" milk price and "starting to pay elements of what should properly be the base price as a bonus or extra".
"It’s a bad habit and is usually employed to deliberately obscure mediocre base price," he said.
Murphy also pointed to both Lakeland Dairies and Kerry Dairy Ireland's decision to cut their base price for February milk by 1c/L.
The chair of the ICMSA dairy committee said Kerry Dairy Ireland "should be leading from the front given the goodwill shown to them in December".
He also highlighted the fact it had delivered a "very positive start" with its January milk price announcement.
The processor had announced that the milk price for January milk supplies was 53.5c/L, including VAT.
Kerry Dairy Ireland had noted that this is inclusive of a base-price top-up of 3c/L, including VAT and quality bonuses.
This marked another increase in milk price for Kerry suppliers; up from 50c/L in December, 49.5c/L in November and 48.5c/L for October.
However Murphy said today: "Here we are now second month in and a price cut.
"Lakeland's are more-or-less the same. On the surface, the Lakeland's price announcement shows potentially no change for a farmer for February milk.
"But when the early calving bonus is removed, farmers are left with a lower base price".
He believes that "there is plenty of scope for the base price to not only to be maintained but actually increased given the buoyancy of butter in the last couple of weeks".
"Markets continue to be strong and there is no reason that this won't continue for the next number of months and certainly into peak production.
"Certainly, cutting the base price at this time is a retrograde and unjustified on the parts of both Lakeland and Kerry Dairy Ireland and the other processors must show more backbone and confidence.
"We’ll expect both to forget about the optional extras for March milk price and restore the proper 50c/L that is the base price that all market analysis indicates as justified," the chair of the ICMSA dairy committee said.
