41cpl isn’t good enough – IFA Dairy Chairman

Lakeland Dairies announcement of a 41cpl milk price for milk produced in January doesn’t reflect market trends according to IFA Dairy Chairman, Stephen Arthur.

He stated that the Ornua PPI for January returned a farm gate price of 45.8cpl excluding the Ornua Value Payment. While milk processers lament that the cost of processing is on the rise, a 5c differential between the Ornua PPI and farm gate price simply cannot be justified. Processors cannot expect farmers to foot the price of increased processing, this needs to be returned from the marketplace. We need the 5c differential to cover our production costs.”

As many farmers begin to recommence supply, several milk processors will offer seasonal bonuses for January, February and March.  IFA Dairy Chairman Stephen Arthur said “Seasonal bonuses cannot be used as smokescreens by processors to portray a rise in milk price, we need an increase in the actual base price and 1c won’t cut it.”

The board of Glanbia is due to meet tomorrow, to agree milk price. “Glanbia and the remaining milk processors who have yet to announce a milk price for January must pay what the markets are returning. He said, while 41cpl may look like a healthy price, our margins are being eroded by rapidly rising input costs.”

Agricultural input prices have increased by almost 17% over the past 12 months to the end of November 2021 according to the CSO.  This does not even factor in the recent additional increases in fertiliser, energy and feed prices that continue to rise on a weekly basis.

“Farmers need a milk price in the mid-forties in order to cover our cost of production which has soared in the past 12 months” Stephen Arthur concluded.