IFA County Dairy Committee Chairman Seamus Brennan said that the Irish Dairy
Board had held the prices of butter and SMP traded by co-ops during March at
the February level, which yielded a gross 37.86c/l before processing cost,
at 3.3% protein and 3.6% butterfat.  He added that today’s Fonterra Global
Dairy Trade auction had seen a modest 2.4% price adjustment overall, and a
small 1.5% price increase for SMP.
Mr Brennan stressed that IFA had argued in February that a 3c/l price
increase to 33c/l + VAT was fully justified, and this argument remained
valid for March, as no co-op had increased their price much above 31.5c/l +
VAT.  He added that, as Cheddar cheese prices are now rising, a 1.5c/l price
increase in March is both credible and affordable for all co-ops, and
important to allow farmers cope with rising input costs and make necessary
on farm investments.
“While top spot quotes have weakened somewhat in recent weeks, it is clear
that, in the main, butter and powders have continued to trade at reasonably
strong prices during March.  In addition, Cheddar Cheese prices, which
normally lag behind other commodity price trends by a few months, have
started to lift in the last few weeks,” Mr Brennan said.
Commenting on global markets, he added that the small 2.4% adjustment in the
Fonterra weighted average auction price, and the 1.5% increase in average
SMP prices, reflected the fact that buyers still see the world market is in
relatively tight balance despite recent weakness in spot quotes.
“It is clear to me that co-ops have scope to increase milk prices in March.
To allow their suppliers’ margins to recover in the face of rising input
costs, and to enable them to plan necessary on-farm investments, they must
pass back 1.5c/l on March milk,” he concluded.