IFA National Dairy Committee Chairman Sean O’Leary said that Glanbia and Lakeland, in increasing their November milk price by 2c/l have taken a welcome step towards delivering sustainable milk prices in 2017.
He urged all other co-ops, which are meeting this week to set November milk prices, to follow suit.
“It is clear that EU average dairy market returns for the month of November circa 32c/l and the November Ornua PPI increase, justifty a significant increase this month.
“It is vital for dairy farmers to return promptly to positive margins and to be able to plug cash flow shortages built up, especially in the last 12 months,” Mr O’Leary said.
“Co-ops should have the confidence to increase milk prices to the full extent that markets allow.
“At the Dairy Forum last week, chaired by Minister for Agriculture Michael Creed, we heard from industry experts that the global supply of milk was unlikely to increase significantly within the next 12 months.
“After two years of negative margins on farms in most milk production regions and significant increases in cow culls, volumes will be very slow to recover, and dairy markets and prices should therefore be reasonably buoyant in 2017,” he said.
“Board members in all other co-ops will be meeting this week to set their November milk price.
“They should not let low winter volumes dissuade them from increasing prices, as every cent passed back from the marketplace improves the viability of dairy incomes coming to peak next year,” he concluded.
The extent of what the ICMSA President, John Comer has described as “a disastrous two years” for Irish farming was made clear with the release of the CSO’s 2016 Advance Estimate Figures on Output, Input and Income in Agriculture.
The figures are very stark indeed and show a fall of €339 million in the value of the milk produced between 2014 and 2016 despite the volume growing by some 4.7% in 2016.
Mr Comer said that the situation where dairy farmers were working harder for massively reduced income – or even no income at all – had been made clear and he said that measures to curb this ruinous price volatility and the margin-grabbing by corporations that this volatility enabled, must be urgently considered.
ICMSA raised this matter again at the recent Dairy Forum and the ICMSA President urged Minister Creed to demand of the Commission that the Voluntary Milk Production Reduction Scheme be made an automatic response where prices to farmers fell below the cost of production.
It was no longer acceptable, said the ICMSA President, to have a situation where everyone in the supply chain from the farm gate onwards was able to keep or increase their own profit margins while the farmer-producer was wiped out to the extent that these figures demonstrated.
On the beef sector, the ICMSA President said that the figures between 2015 and 2016 showed a sector whose value of output had fallen by 2.1% despite a 3.6% volume growth highlighting a similar situation where farmers are producing more but getting penalised on price.
Mr Comer said that pattern clearly identifiable from the figures was the old story.