Irish milk prices lagged behind European counterparts in December 2013 along with the rolling 12-month average price and this should be addressed immediately as we move into 2014 and the peak milk production months, according to Pat McCormack, deputy president and chairperson of ICMSA’s Dairy Committee.
Mr Comer said that monthly calculations using GIIL and Kerry as the Irish benchmarks shows that Irish milk prices were 1 cent per 100kg below the European average for December.
“The average milk price paid across Europe in December was €39.89 per 100kg and GIIL and Kerry paid out €38.94 and €38.85 respectively. These prices are excluding VAT and based on 4.2 per cent fat and 3.4 per cent protein. The range of prices on the European market varies from €36.67/kg in France to €44.11 in Italy with the Irish processors in ninth position out of 16. The rolling average for the 12 months also shows both Irish companies below the European average which is a concern for Irish farmers,” he said.
The deputy president said this must be addressed and reversed over the course of 2014.
“Looking at an international level, Swiss company Emmi continues to pay the largest milk price at €52.12 while Fonterra in New Zealand are returning €38.31/100kg which is almost at the European average.
“Irish farmers will be asking themselves how Fonterra can pay a price similar to the Irish price given their product mix and distance from the marketplace.
“Current market indicators are showing good market returns in the dairy ‘spot’ market with increases in the Global Dairy Trade Auction and a stable return for the Irish Dairy Board’s basket of goods with the purchasing index remaining at €133.59.
“The Irish co-ops have also received an additional €2m in a bonus from the Irish Dairy Board this year with a total bonus of €11m which is equivalent to about 0.4c per litre”, said Mr McCormack
“Milk processors are in a very positive position at this time and with superlevy now eating into cashflow, we are calling on the co-ops to utilise the 11m from the Irish Dairy Board to pay a bonus at this time,” he concluded.