IFA National Dairy chairman Sean O’Leary has said that, assuming that all co-ops increase their May milk price by 1cpl, including VAT, many would have a way to go to catch up with the 30.78cpl + VAT average indicated by an update to the April Farmers Journal league to take account of the assumed increase.
Mr O’Leary urged all co-ops to aim to beat the average in their June milk price decisions so that Irish farmers can get to clear outstanding debts and improve their still fragile cash flow and financial positions over the peak production period.
Meanwhile, Mr O’Leary said butterfat and SMP price increases at last week's GDT auction underpinned the sustainability of current buoyant dairy prices.
While the weighted average price for all product traded at today’s auction was down very slightly by 0.8 per cent, reflecting the poorer performance of WMP (-3.3 per cent), butterfat and SMP prices continued their strong recovery. It is hard to argue against the full justification for significant milk price increases for June milk, Mr O’Leary said.
The prices reached were equivalent to an Irish milk price, after processing costs of 5cpl, of 35cpl + VAT (36.9 cpl including VAT), he said. “I see no reason why Irish co-ops would be cautious and conservative on milk prices.”