Higher Than Expected Ornua PPI for May and 4.8c/l Uplift in EU Returns Confirm Co-ops Need to Start Working on Price Increases

IFA National Dairy Chairman Tom Phelan has said that co-ops owe it to their suppliers to reflect in their May milk price decisions the 4.8c/l increase in EU returns and the several points higher than expected 105.4 pts May PPI.

“The time for price cuts is now over. While cuts in supports by both Lakeland and Glanbia are disappointing, the base price must reflect the higher EU returns and PPI – which Glanbia’s doesn’t. Over the coming days, co-ops must first work on holding their payout for the month, and then plan for improved prices from June milk onwards,” Mr Phelan said.

“We in IFA have been highlighting for weeks just how much improvement has occurred in the average EU market prices for the commodities relevant to the Irish product mix. Since January, returns for this product mix have increased by nearly 5c/l – more than half of the decrease of late 2017,” he said.

“All indicators would suggest that May should mark the end of price cuts, and in this respect we urge co-ops to make the right call and do right by their suppliers by reflecting the reality of improved market returns,” he said.

“For next month, I put all co-ops on notice that IFA member suppliers will expect them to start leveraging the improved returns they are getting from the market place. Farmers will be, legitimately, expecting higher June milk prices,” he concluded.