ICMSA want E2 million dairy fund paid directly to farmers

In welcoming the announcement by the Irish Dairy Board of a €2m fund for its dairy farmers, Mr. John Comer, President of ICMSA, said that this was a very welcome and badly-needed initiative from the Irish Dairy Board and it is essential that Co-ops pay this fund directly to dairy farmers as soon as possible given the cash-flow and fodder crisis on farms.

In welcoming the announcement by the Irish Dairy Board of a €2m fund for its dairy farmers, Mr. John Comer, President of ICMSA, said that this was a very welcome and badly-needed initiative from the Irish Dairy Board and it is essential that Co-ops pay this fund directly to dairy farmers as soon as possible given the cash-flow and fodder crisis on farms.

However, in the context of the clear and justified expectations that milk price will increase further for April milk, Mr. Comer said that it is also essential that an Irish Dairy Board ‘top-up’ payment is made to farmers in a distinct fashion and not subsumed in a milk price increase already justified by developments in the marketplace.

Mr Comer said that while the improvement in weather conditions in recent days has brought some relief to farmers, this fodder crisis is far from over and farmers will be dealing with its implications for a long period ahead - both in terms of farm management and financially. The IDB Fund is certainly welcome in this regard and following a meeting with the Irish Dairy Board earlier this week at which ICMSA Dairy Committee spelt out the realities facing dairy farmers at this time, Mr. Comer said that it is his association’s view that the proceeds of the fund should be passed directly to farmers immediately and in a transparent way that makes the IDB payment demonstrably distinct from the price increases already justified and fully expected by dairy farmers.

Meanwhile, ICMSA cite continued surge in dairy markets and call for 38c/L for April milk. Against further substantial increases in dairy product prices in the EU and globally in recent months and with global milk supply expected to remain tight, an upward movement in April milk price is not only justified but desperately needed according to Pat McCormack.

“With a lower than expected Spring peak in the Northern hemisphere and with a sharper than expected decline in production in the Southern Hemisphere, dairy product prices continued to increase during April to the point that wholesale prices for certain products are above the previous peak levels of 2007 when Irish farmers received 40 cents per litre. It’s very clear at this stage that any recovery in milk supplies will be in the Autumn period which should mean strong prices for the remainder of 2013”, said Mr McCormack

The ICMSA Deputy President said that given the massive bills on farms at present due to the fodder crisis, the key priority for dairy farmers in relation to milk price at this time is the price for April milk and it is quite clear that all market indicators have shown substantial improvements in April including: Dutch quotation for butter, WMP, SMP and whey have increased by 18%, 15%, 22% and 9% respectively since the start of April. The butter/SMP price is equivalent to 47.5 cents per litre and the WMP price is equivalent to 49 cents per litre before processing costs; The IDB price index increased from 111 to 114.5 for March with another substantial increase expected for April; Butter and SMP prices in the UK increased by 18.6% and 16.7% during April. Mr. McCormack said that ICMSA met with the Irish Dairy Board this week who expressed a high level of confidence regarding the dairy market for the months ahead. “With most Co-ops around 35 cents per litre for March, we estimate that a price in the region of 38 cents per litre is justified for April milk. It is in that context that ICMSA expresses its disappointment with the decision of Kerry not to raise its price for April milk. In the present circumstances, where their own suppliers are amongst the worst affected farmers in the country by the weather and fodder crisis, Kerry should be leading from the front and not be content to make up the ground, in some fashion, at some later date. Farmers need the market price now – they never needed it more”, said Mr McCormack.