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18 May 2022

Longford Leader Farming: ICMSA predicting next week’s milk price announcements to hit 45cpl

Aurivo decision to cut its October milk price by 1cpl ‘will disappoint suppliers'

ICMSA Dairy Committee Chairperson, Noel Murphy has said that milk suppliers would be looking at some ‘standout’ points relating to the next round of price announcements.

The Chairperson of the ICMSA Dairy Committee, Noel Murphy, said that milk suppliers would be looking at some ‘standout’ points relating to the next round of price announcements.

“The first thing we are looking at the fact that the Co-ops have seen fit to increase their processing costs by around 25%: that’s fine and we’re satisfied that the inflationary pressures being felt at Co-op level can explain that.

"But, by exactly the same token, the Co-ops will have to accept that their farmer-suppliers are experiencing their own inflationary pressures and our production costs are surging by at least the same level as Co-op processing costs.

"So if they want to show us their adjusted costs, then we can show them our adjusted costs. Putting that together with the market data gives us our price and that’s why ICMSA is saying clearly that every Co-op in Ireland should be paying at least 45cpl in their price announcements for Feb milk due to be made over the next week”, said Mr Murphy.

The ICMSA Dairy Chairperson said that his association was “already looking hard” at the gap that Mr Murphy said was “yawning wide” between the Ornua PPI and the price that individual Co-ops were paying farmer-suppliers.

“Dutch dairy quotes have exceeded 50cpl for the last three months and show no signs of coming back – actually all the data points to that continuing and climbing.

Interestingly, the base PPI price increased by over 4cpl last month, but that only translated to an average 1cpl of a price rise from most Co-ops.

So there’s already about 3cpl of a gap between what the Ornua Index is showing the Co-ops received and what they paid the farmers. We’ll be watching this very carefully this month and the Co-ops had better be paying prices that close that gap”, said Mr Murphy.

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