IFA National Dairy Committee chairman Sean O’Leary has reiterated his challenge to co-ops to build on decisions to hold base milk prices in June and move towards a situation of improving prices in line with market improvements as they become possible in coming months.
This, he said, was not an unreasonable request when EU dairy prices had been firming solidly for the last nine weeks, and the GDT, while unchanged on average, saw a significant 1.9 per cent increase in WMP prices.
“EU dairy prices for the last two months have increased very substantially, with butter not far off 20 per cent up, WMP 13 per cent, whey powder nearly 16 per cent up. Even SMP, which has been under greatest pressure in the last 18 months, has seen prices recover by 5 per cent, admittedly still just above intervention equivalent,” Mr O’Leary said.
“By our calculations, a representative gross return for an Irish product mix is, using the EU MMO figures for July 10, 28.6cpl before processing costs. This would be equivalent to a farmer milk price of 23.6cpl + VAT, or 24.83cpl including VAT,” he said.
“We are clear that our request for a commitment on milk prices for 2016 is justified and necessary to sustain farmers’ badly shaken confidence, and to, in time, pass back improved dairy prices to help ease farmers’ income crisis,” he said.
And speaking after Minister for Agriculture Michael Creed addressed the IFA Executive Council last week, Mr O’Leary said he had urged the Minister to first match Ireland’s €11.1m share of the €350m element of the EU aid package voted on Monday, last and then secure the necessary flexibility to be able to utilise it to support the cash flow needs of dairy farmers.
“I made it very clear that nothing in the aid package should put Irish dairy farmers who have expanded in the legal certainty of the end of quotas in 2015 at a disadvantage. The potential €22.2m must help support their cash flow needs, by reducing the cost of short term finance. We have suggested that it could indeed be used to enhance the State aid backed, low cost, short term loan scheme we have been progressing with the Department of Agriculture over the last few months.
“What farmers need most of all at this point is to see their cash flow improve promptly. The quickest way to do this is for the Minister to deliver urgently on the State aid backed cash flow loans we have been lobbying for. Furthermore, with output already falling in the EU, even without EU incentives, and globally, firming dairy markets should help co-ops build on their June milk price decisions,” he said.