The ICMSA has accused Irish milk co-ops of “dragging their heels on price”.
The farm group made the remark in response to a statement from Fonterra, which confirmed that its forecast milk price for 2022 will “further increase”.
The ICMSA’s Noel Murphy, the chairperson of its dairy committee, said this is a “clear indication” of the direction of milk price.
Murphy said that while the association expects price-per-litre to reach 43c/kg by this year’s peak, any gains are being ‘eaten through’ by unprecedented input levels.
Irish milk co-ops
Murphy said that the onus was now “squarely” on co-op boards to ensure that milk price going forward is “at a minimum” more than the monthly Ornua PPI.
He acknowledged that farmer milk price did move forward for December milk.
However, he said it demonstrably lagged base Ornua PPI and pointed out that this was the case without even including the value-added component.
“The only answer is for milk processors to ensure that the milk price paid to farmer-suppliers is maximised.”
As far as ICMSA is concerned, that means the baseline must be the Ornua PPI. This, he said, currently is equivalent to 41.5c/L, excluding the value-added component.
“No milk processor achieved this price. As co-ops prepare to set milk price for January, their boards will have to insist that the Ornua PPI on that date is the minimum milk price paid to farmers.”
“The reality is that Irish co-ops are dragging their heels on price while inputs surge ahead,” said Murphy.
The ICMSA chairperson stated that the parameters of the issue were now “clear”, and it was up to every board of every co-op to “step up and set a price” that used the Ornua PPI as the baseline.