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IFA Encourages Co-ops To Commit To Year-End Milk Prices

Published on Sep 9 2018 9:30 AM in Supply Chain tagged: milk prices / IFA / Co-ops

IFA Encourages Co-ops To Commit To Year-End Milk Prices

IFA National Dairy Committee Chairman Tom Phelan has said co-op board members would meet in coming days to decide on their August milk prices and consider the situation to year end.

The IFA said that the meeting must be the occasion to look back on an extremely challenging farming year, and to return the strongest price markets allow right to year-end.

A Firm Commitment

“Whatever about the slight easing in the first GDT auction of September, European dairy indicators were all firmer at the end of August. They all suggest milk price equivalents based on late August market returns in the low to mid 30’s before VAT, well above the July Ornua PPI and the average milk prices paid by Irish co-ops for July milk,” Phelan said.

“We believe there is scope for co-ops to make a firm commitment to at the very worst hold current payouts at least till the end of the year,” he said.

Phelan added co-op board members must also take stock of their pricing structures, and restore price transparency and competitiveness by addressing growing milk price gaps.

“Co-ops have really come up trumps for farmers in the face of the weather challenges of 2018: free credit facilities for feed and fertiliser purchases, deferred payments, rebates on inputs, top-ups to milk prices, fodder imports are all much appreciated by farmers under unprecedented fodder and cash flow pressure,” he added.

He said that this should not interfere with the payment of competitive prices, highlighting the “big price gaps” that have developed this year.

“While it may well be that merchant credit facilities, deferred payments and rebates will make up some of the difference for farmers, we have calculated that a 350,000-litre supplier January to July milk supply could vary in value by up to €5,300 purely as a result of the price gaps,” he said.

“I call on all co-op boards to examine carefully this month not only their August milk price decision, but also in the case of the lower payers how they propose to close the gaps that have developed.”

© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition. 

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