Tipp farmer Pat McCormack, Deputy President of the ICMSA, has highlighted that Ireland is falling down the league of European milk prices.
Mr McCormack said that while there had been some small market movements over the last four weeks, the essential position was unchanged and he cited the most recent analysis by ICMSA that calculated Irish processors’ performance actually fell from where they were between 9th and 10th out of 16 in the league of European milk prices last December to their January 2014 position where they were between 13th and 14th out of 16.
This was not a recent development according to Mr McCormack. “The rolling average for the 12 months showed that Irish processors paid below the European average and several questions arise from that fact: particularly interesting from an Irish point-of-view was the fact that Fonterra in New Zealand were returning 38.31 euro/100kg which is almost at the European average.
“Irish farmers have been asking how Fonterra can pay a price similar to the Irish price given their product mix and distance from the marketplace. We’re still awaiting an answer to that question. In the same way as we’re still awaiting an answer about what happened the bonus the processors and Co-ops have received from the IDB. The Irish Co-ops have received an additional €2m in a bonus from the Irish Dairy Board this year bringing up the total bonus figure to €11m, which is equivalent to about 0.4 cents per litre. Milk suppliers want to know when that bonus is going to be passed back and in the meantime they don’t feel the urge to cheer processors who are doing no more than paying the minimum that the market clearly warrants”, said Mr McCormack, who is also the Dairy Committee chair.
Meanwhile Teagasc are urging the use of appropriate benchmarks to measure milk production as Ireland faces into a period of expansion in the next five to ten years. Teagasc addressed the issue at a dairy seminar, recently, in the Horse and Jockey. Milk production in the Republic of Ireland has been constrained by milk quota since 1984 but milk producers in Northern Ireland have not been similarly constrained, especially since 1995. By examining the changes which have occurred in the Northern Ireland dairy industry, we can gain insights into how the Irish dairy industry may change post-2015. Teagasc Director Gerry Boyle emphasised the key role that Teagasc will play in supporting expansion in milk production. This event was the first in a series of technical workshops that Teagasc will be holding in the countdown to the abolition of milk quotas.