The Monaghan IFA  Dairy Committee has identified a realistic 1.5c/l January
milk price increase as its first target for 2011.  Chairman Seamus Brennan
said this price increase was made possible by rapidly rising but sustainable
dairy commodity returns, and made absolutely necessary by fast increasing
input costs eating into barely recovered dairy farmers’ margins.  He urged
co-op boards, who would be meeting in coming days to set their January milk
prices, to implement immediately this fully justified price increase.
Mr Brennan said, “Rising European milk and whey powders and butter prices
have meant that, by last week, gross returns from the main commodity
combinations were between 37 and 39c/l, continuing an uninterrupted rising
trend which started in late November.  This is in the context of very firm
international markets, and it is clear that the gap between market returns
and the price paid to Irish farmers is widening to unjustifiable levels.”
“The Irish Dairy Board must now reflect the January average increase, which
we estimate at around 6% over December returns, and bring its index for
butter and skimmed milk powder traded during that month to around 35c/l.
Improved returns have created a real opportunity for co-ops to immediately
increase producer prices by at least 1.5c/l to 30c/l + VAT,” he added.
“Furthermore, input prices are on a fast rising trend, especially feed,
fertiliser and fuel, which we expect could increase producer costs by as
much as 14% in 2011, necessitating milk prices at least 3c/l in excess of
the 2010 average just to preserve current levels of margins on farms,” he
said.
Mr Brennan warned co-op board members against using superlevy concerns as
spurious excuses to delay a fully justified price increase. “Farmers know
the score on superlevy fines and take their own responsibilities each year.
Just because a minority run a serious risk of superlevy is not a valid
reason to deprive farmers from a price increase.”
The IFA National Dairy Committee is now starting its 2011 Milk Price
Campaign, which will see it lobby board members in all co-ops for an
immediate 1.5c/l price increase.