ICMSA Highlights Co-Op Rate Gap

THE gap between the top and bottom paying co-ops for milk is now very significant and, in the case of those co-ops at the bottom, board members are being left with serious questions about the reasons for the massive gap and an obligation to take immediate steps to address it, according to Pat McCormack, deputy president of ICMSA and chair of the is dairy committee.

In addition, Mr McCormack said it was “high time” that co-ops stopped talking down the milk price outlook and instead instilled a level of confidence in their suppliers who are facing a very expensive winter period given the quality of fodder available and very expensive concentrate prices.

“Markets have improved, indications are that they will further improve, and it is about time the strategy of simply passing back the problem of poor markets to farmers is changed. Farmers cannot - and will not - take all the heat of poor markets,” said Mr McCormack.

He observed that two farmers, both of 300,000 litres, but where one is supplying into the top paying co-op and the other into the lowest are now looking at a difference in their milk cheque for May / June alone of about €2,400.

This is a massive difference and one which farmers in the poorer paying co-ops simply cannot carry, he said.

Mr McCormack said it was quite clear that markets have improved and evidence of this includes the following the Northern Ireland Milk auction in July increased from the equivalent of 28 cen per litre to 30.6 cents per litre; the Dutch dairy quotations since the end of May had increased from €2,420/t to €2,700/t for butter; €2,350/t to €2,480/t for WMP; €1,980/t to €2,200/t for SMP, and €820/t to €890/t for whey, and figures published by An Bord Bia showed clear improvements in products prices since the end of May.

In addition to the above, and with clear indications of a supply correction on the global markets, particularly the USA, the outlook for milk price has certainly improved and it is also significant that UK processors have withdrawn proposed price cuts for August due to farmer pressure, he said.

“There have been improvements in dairy markets and it is about time milk processors acknowledged this and that the poorer paying co-ops stepped up to the mark on milk price”, said Mr McCormack.