Co-op boards must increase the base price for January supplies of milk, as current dairy market returns fully justify a lift in price, Irish Farmers' Association (IFA) dairy chair Stephen Arthur has said.
“Input costs remain stubbornly high and with weaker than anticipated milk supply in the backend, farmers starting back into milk this spring need a strong milk price.
“This isn’t the time for lining the coffers, every cent has to be paid back to the farmer,” Arthur said.
The cost of milk production on farms has soared in the past 12 months and dairy farmers' cashflow was only sustained by the strong buffer carried over from 2022, he added.
Long gone
“The buffer is long gone. Most farmers need a base price in excess of 40c/l to sustain their businesses going forward,” he said.
The IFA said that while European markets are relatively stable, the latest Global Dairy Trade auction provided positive sentiment to the global dairy market lifting by 4.2%.
Crucially, butter traded substantially higher than in European spot and futures markets, indicating the potential for butter prices to rise in the short term, it added.
Ornua PPI
Ornua this week announced that its purchase price index (PPI) for January is 125.1, largely unchanged from the 125.5 for December.
This equates to a farmgate milk price of 35.3c/l, excluding VAT.
The result, Ornua said, reflects seasonally quieter market demand through the month of January.
"In addition, the Ornua value payment payable to members co-ops in the month is €0.2m, which equated to 1.2% of gross purchases in the month," a company spokesperson said.