Co-ops Must Consolidate April Hardship Payment into a Further Increased May Base Price – Kiersey

Commenting on the announcement by Lakeland co-op that they will make a 1.72c/l hardship bonus payment on the April milk price, which follows the decision by Glanbia that they will make a hardship payment of 1c/l, IFA National Dairy Committee Chairman Kevin Kiersey welcomed the effort by co-ops to assist farmers in these very difficult times.

However he said market returns justified a base price increase and called on Glanbia and Lakeland to consolidate their hardship bonuses into their May milk price.

He further urged those co-ops who have yet to decide on their April milk price to make a straightforward 2c/l base milk price increase.

“A price increase is positive, but it should be a base price increase where the market situation justifies.”

“The co-ops have worked hard to assist farmers in the fodder crisis, through extended or free credit facilities, fodder redistribution, etc., and farmers are appreciative of those efforts. However, the bills will have to be paid, and in their own interest, co-ops must ensure that farmers get the fullest possible benefits of extremely buoyant markets as we come to peak,” Kevin Kiersey said.

“The April IDB PP Index has risen to an unprecedented 120.6 points, a six point increase in a month, reflecting rising butter and powder prices in particular. This reflected market developments: EU average commodity returns reported for 28th April 2013 have also lifted massively, to €3870/t for butter, €3020/t for SMP and €3630/t for WMP,” he added.

“The SMP/butter increase since early March alone has added 6.3c/l to the gross returns available to EU dairy product sellers, including Irish co-ops, before processing costs. This means SMP/butter gross returns were 44.3c/l, WMP 45c/l and Cheddar + whey powder just under 41c/l,” he said.

“There is ample scope for a real, base price lift of at least 2c/l on April milk, which farmers need badly to face enormous feed and merchant credit bills. Co-ops must see that it is in their own best interest to deliver fully justified price increases back to farmers,” he concluded.