The ICMSA expects milk processors to pay above 40c/L when announcing prices in the coming week.
The specialist dairy farmer organisation revised its predicted prices for October 2021 milk supplies following a meeting of its dairy committee.
October 2021 milk prices
ICMSA’s dairy committee, chairperson, Gerald Quain, in a statement on Friday, November 5th, 2021, said:
“The serious upward momentum behind the rise in dairy markets should result in substantial rises in base milk prices for October milk.”
“Even without added value, the Ornua PPI is showing prices rising by over 1c/L. When added value is accounted for, the price is well in excess of 40c/L.”
He said the confirmation from Ornua of price increases is “well below” the price increases seen in Dutch and European quotes during last month.
Dutch quotes show the standard butter and SMP mix surging over 7c/L in the last five weeks. WMP increased by 5c/L in the same period.
“This level of increase is unusual in a given month, but these are the facts of the current marketplace.”
He called on co-ops and milk purchasers to pass back in full those better prices to their suppliers for October milk and beyond.
Quain said that dairy farming is entering an uncertain period in terms of:
- Climate mitigation;
- Input costs increases.
He said the price farmers receive will have to reflect these “new realities”.
“The days of processors paying the lowest price they could get away are most definitely gone.”
Reflect production costs and reward
He said current and future milk prices will have to reflect full production costs, along with a fair reward for farmers.
“Milk production is going to become significantly more expensive in 2022. No-one could or should expect that they could continue making the farmer-suppliers carry the increased costs.”
He said the farm group has been pointing out for years that the transition to greater sustainability was “going to mean an end to the cheap food era”.
“Retailers and consumers are going to have to begin paying what it actually costs to get that product to their fridge.”
“The days when a milk price in the low 30s was considered a good price for farmers are well and truly finished.”
“Milk price for October is going to be above 40c/L”, he concluded.
See milk price updates.