The Irish Creamery Milk Suppliers’ Association (ICMSA) has warned milk processors that they are “walking a fine line” on price and supply dynamics.

The association’s dairy chair Noel Murphy said that although production is currently strong, farmer margins remain tight.

Murphy stated that milk price increases should be on the table if co-ops are to secure continued supplies as he rubbished any notions of a milk price pull.

“There should be no negativity around milk price at present and processors should be looking to increase prices – certainly not wasting their time peddling the notion that that we are in a negative space,” he said.

“Holding milk prices steady is essential to protect farm viability and ensure continued investment in sustainability and future-proofing our dairy sector.

“There are enough external factors to be worrying about – including trade tensions and fluctuating export demand – without making up imaginary pressures on milk price that are nowhere supported by the data and facts in the marketplace.”

Murphy pointed to the US Department of Agriculture’s July forecast for higher dairy prices as evidence of market supplies being met with steady demand, as well as positive signals from southern hemisphere markets showing price confidence.

“Obviously our focus is primarily on Europe and Ireland in terms of prices and trends and our export destinations and those are all showing encouraging resilience,” he continued.

“Dutch dairy quotes increased almost a 1c/l for WMP mix and the industry standard indicator Butter/SMP increased marginally 0.5c/l with some fluctuations in the timeframe over the four weeks of June.”

The ICMSA dairy chair’s comments come after Lakeland Dairies was first out of the traps on June milk price, as its co-op’s board agreed to hold supplier prices.