July Ornua PPI Remains Above the Price Paid by Most Co-ops – Phelan

IFA National Dairy Chairman, Tom Phelan said the July PPI reduction of 0.7 points announced today by Ornua, which is equivalent to a milk price of 30.9c/l including VAT, still leaves room for the majority of co-ops to hold their July milk price, at the very worst.

“Apart from the West Cork co-ops, all milk purchasing co-ops have undershot the Ornua PPI in the milk price they have returned to farmers for most of the last eight months,” Mr Phelan said.

“Despite the fact that Irish supply is up by 10%, global milk supplies for the first half of the year are down; Germany (-1.5% on May and -1.4% in June), France (-1.6% in May and – 0.2% in June) and Dutch milk output, still moderated by herd reduction, is down 2.7% for the January to May period. Heatwaves in June and July are compounding these figures.

“Demand remains relatively good in Asia, South America, the EU and the US,” he added.

“Concerns over the potential impact of economic and geopolitical factors that have yet to materialise is not a good enough reason to deny Irish farmers for several months a milk price fully justified by market returns,” he said.

“Co-ops will be meeting to set milk prices from next week and they should be able, at the very minimum, to hold prices at their current levels,” he concluded.