Dairy processors have been called on to return “value gained in the market” back to dairy farmers when they announce their milk prices for May supplies.
The Irish Farmers’ Association (IFA) has urged processors to increase the price they pay to farmers for their next round of milk prices, which are due to be announced over the next two weeks or so.
According to Stephen Arthur, the IFA’s dairy chairperson, markets are improving for dairy products, with the Global Dairy Trade (GDT) showing an improvement of 1.7%.
He also cited the latest Ornua Purchase Price Index (PPI), announced this week, which implies an indicative return of 39.6c/L, an increase of 1.1c/L on the PPI for April.
“Milk volumes continue to lag behind 2023 levels which means reduced sales for dairy farmers. Together with the increased cost of production from the very difficult spring, dairy farmers need to be paid for their product and we believe the market can support a price increase,” Arthur said.
He added: “An increase in price is needed to alleviate the cashflow pressure on suppliers and it is essential that processors start returning the value gained in the market back to farmers.”
Similar calls have been made by the Irish Creamery Milk Suppliers’ Association (ICMSA), which said this week that dairy markets have moved on “considerably” during May.
“Not only do dairy farmers need an increase in milk price, the market justifies it and dairy farmers need a strong signal from their milk processor that they understand the pressures on them at present by the delivery of a strong milk price increase for May,” ICMSA Dairy Committee chairperson Noel Murphy said.
“From high input costs to reduced milk supplies due to weather, costs, and nitrates pressures, milk processors need only look at the input bills being built up by farmers to realise the pressure on their suppliers,” Murphy added.
“The ICMSA believes that a milk price of 45c/L is not only justified but required to restore a level of confidence in the sector, and another clear message from dairy farmers is that they are fed up with the gimmick payments… Pay us on base price and cut out the gimmickry,” the ICMSA dairy chair commented.