There are indications of stability and indeed improvements coming into dairy markets and on this basis, Co-ops should hold their May milk price according to Pat McCormack, Deputy President and Chairperson of ICMSA’s Dairy Committee.
Talk to any farmer, Mr McCormack said, and he/she will tell you that their May milk cheque is absolutely key to their financial health at year end.
Following a very expensive March to Mid May period due to poor growth conditions, reduced milk production, general input price increases, debt repayments linked to planned expansion, superlevy fines and reductions in direct payments for some farmers, it is absolutely essential that there is no further reduction in milk price at this time.
Mr McCormack said that Co-op boards must take account of the following issues when setting milk price for May:
l The latest Global Dairy Trade Auction on 5 June 2012 was up 13.5%.
l The Dutch dairy quotations for dairy have stabilised in the last two weeks and for some category of products have shown an improvement two weeks in a row, the first such increases in 2012.
l Dairy product prices reported by An Bord Bia for week ending 25th May were either stable or improving.
l The weak Euro at present is making Irish exports more competitive on global markets.
l It is quite clear that Co-ops profits improved considerably in 2011. These profits must now be utilised to support milk price if necessary during the peak period.
l The poor weather conditions, reduced milk production and increased input costs for the April to Mid May period are expected to cost the equivalent of 2c/litre on an annual basis.
With stability and improvements in dairy markets in the last few weeks, Mr McCormack concluded, by calling on Co-op Boards to maintain milk price at current levels for May, a critical month for dairy farmers.