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With processors announcing cuts to their July milk price, IFA national dairy committee chair Tom Phelan has said “farmers felt let down that their co-ops’ Brexit preparation strategy seemed to rely pretty heavily on cutting prices".
Speaking from the Virginia Show in Cavan on Wednesday, Phelan believes “the co-ops' Brexit preparation strategy is to use farmers’ hard work in terms of increased butterfat and protein content and extra volumes to ‘soften’ the blow".
“With the exception of the west Cork co-ops, which exceeded it, all other co-ops have paid less than the Ornua Product Purchasing Index for the majority of the last 10 months.
"I want to acknowledge that Lakeland Dairies have come closest to the PPI over this period.
Global Dairy Trade auction
“While we recognise that butter market prices have eased, powder prices have picked up on the EU market. This has also been the case for Whole Milk Powder (WMP) at yesterday’s Global Dairy Trade (GDT) auction.”
A lower quantity of product was sold at the GDT, with 34,410t of product moved at the auction in New Zealand on Tuesday 20 August.
The price of WMP, the most important commodity traded on the platform, increased by 2.1% to $3,100/t (€2,797.38/t).
Many Irish milk processors have blamed poor butter markets for a drop in their July milk prices. The price of butter fell by 3.4% this week to $4,025/t (€3,632.08/t).
Future prices
Phelan has made a “call on co-ops to communicate how they will at least hold milk price levels to year end".
"This is essential to protect farmer confidence, which is such an important ingredient in the sustainability of the Irish dairy success, and co-ops must not undermine that confidence.”
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