Dairy market rally makes latest milk price cuts 'even more suspicious' - ICMSA

Longford Leader Reporter

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Ger Quain, ICMSA

Ger Quain, ICMSA

The rally evident in the latest spot prices has been cited by ICMSA Dairy Chairperson Ger Quain as further evidence of what he called the price “sleight-of-hand” that was employed by the processors and Co-ops in setting their price for August milk.

Mr Quain said that it was obvious that markets were both rallying in the short-term and are also beginning to move upwards as the latest global supply data is absorbed into long-term forecasting. Despite both of these, most of the Co-ops followed what the Dairy Committee Chair described as “the usual suspects” in cutting the milk price paid to their farmer-suppliers for last month’s milk.

Mr Quain said that in meeting with farmers at last week’s Ploughing Championships he was struck by how many had shared his own suspicion that certain Co-ops had availed of the confusion and disruption in the beef sector to smuggle though the milk price cuts while farmer were distracted and also the air of uncertainty that many of the same Co-ops were trying to build around the dairy markets despite the hard facts that were there for anyone who wanted to see.

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Butter and SMP mix price has rebounded to over 30.5cpl in the latest Dutch dairy quotations, while WMP is above 33cpl and the Ornua PPI is at 30.8cpl.

He said: “We saw this very specifically in the setting of the price for August where medium and long-term data was wilfully ignored while an obviously temporary market ‘blip’ was seized upon and a completely unjustified price cut was pushed through on the basis of that.

"What this amounts to is the Co-ops disregarding the weight of evidence and data that’s all pointing to the market moving up and instead jumping on even the most temporary ‘stall’ in that movement and then citing that as market weakness to cut the price. I really don’t know who they think they’re fooling – I don’t think that can really believe it themselves – and they’re certainly not fooling the farmers.

"But the facts of the matter are that 300,00 or 400,000 litre suppliers had €400 or €500 taken from them for August milk for absolutely no good reason and it adds insult to injury when just days after those price cuts are announced we can see the data that shows what we have suspected all along – there’s no market justification for these cuts”, said Mr Quain.  

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