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Positive dairy markets are making a strong case for all co-ops to increase October’s milk prices, according to Irish Creamery Milk Suppliers’ Association dairy chair Noel Murphy.
Murphy said that a milk price rise is needed to bolster farmer confidence after a difficult year on the cost-front after farmers dealt the blow of poor weather conditions over much of the spring and summer.
The ICMSA dairy chair referenced this week’s 4.8% lift in the New Zealand Global Dairy Trade auction and a rise in Ornua’s Purchasing Price Index as the evidence pointing to continued strength in international dairy markets.
“It’s really important that the co-ops and processors recognise and follow-up on that positive feeling.
“And that means paying the farmer-suppliers the increase that the co-ops are themselves receiving – and we mean all the co-ops and processors pay that increase due.
“We absolutely expect that not least because of the mini rally on the butter side again with gains posted in the last two weeks or so, it will be interesting to see if these gains continue for the month.”
The ICMSA called out “some very questionable differences” in the price gap between co-ops and pointed to there only being two milk cheques left this year to correct these differences.
Weather and volumes
Murphy said that the uplift most farmers witnessed in weather conditions in autumn has encouraged them to produce higher volumes than they may have anticipated earlier in the year.
The current volumes flowing into processors reflect a “tentative restoration of confidence” among farmers, but this confidence is dependent on co-ops playing ball on milk price, he added.
“The weather is saving considerable fodder and the situation of farmers - certainly in terms of stress and mental wellbeing – is in a better place and contrasts favourably with the levels of pressure they were under in spring and early summer.
“Dairy markets are ticking upwards steadily, and those better prices are being used to pay down the bills incurred during that very difficult spring and early summer period.”
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