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The IFA has called for improved milk prices as the EU Milk Market Observatory (MMO) shows EU dairy commodity prices continued to increase last week.
IFA national dairy committee chair Sean O’Leary said: “This week in the EU MMO quotes, the average EU butter price has breached the €3,000/t ceiling at €3,050/t and SMP is now over €30/t above intervention at €1,730/t. WMP, all the main commodity cheeses including cheddar and whey powder are also further on the up. These are very significant increases in the last 10 weeks, with butter up 22% and even problematic SMP up 6% over that period.”
“By our calculations, these improved prices would return, for an Irish product mix, a gross 29.2c/l before deduction of processing costs, which could yield a farmer price of 24.2c/l plus VAT (25.5c/l incl VAT).
“Spot quotes, which indicate market trends, are also well up in the last week, with average Kempten (Germany), PZ (Netherlands) and Agrimer (France) quotes up €53/t for butter, €15/t for SMP, and €10/t for whey powder compared to the previous week,” he said.
It is essential that co-ops would now take stock of the outlook for dairy markets
“It is clear that we are witnessing a long-overdue recovery after more than two years of a market slump in global dairy prices. Dairy farmers will need both the financial fillip of improved milk prices to replenish their badly stressed cashflow, and the confidence boost that these will bring with them,” he said.
“It is essential that co-ops would now take stock of the outlook for dairy markets over the coming months. Bearing in mind their suppliers’ cashflow situations, they must build on their June price decisions by budgeting into the coming months for the promptest possible return back to farmers of the now significant commodity price improvements,” he concluded.
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