Monaghan IFA  Dairy Committee Chairman Seamus Brennan said that Glanbia and
Kerry, had both jumped the gun and undershot a fully justified 3c/l February
milk price increase to 33c/l + VAT (34.7c/l including VAT).   Glanbia have
increased by 1.44c/l + VAT in both Jan and Feb, and Kerry by 2.85c/l + VAT
in Feb.
Mr Brennan said that the average combined returns for EU SMP and butter had
lifted by 8.6% between January and February, and yesterday’s 5.9% increase
in the average Fonterra auction price confirmed the strong market outlook to
November 2011 at least.
He urged the Irish Dairy Board to reflect immediately the increase in market
prices for product traded during February, and to lift the index by the full
extent of the 3c/l to just under 38c/l (at 3.3% protein and 3.6% butterfat).
Mr Brennan also called on all co-ops to pass back the 3c/l minimum increase
in the February milk price, in addition to the January milk price increases
most of them have already paid.
Both Glanbia and Kerry have now lifted their price to 31.36c/l plus VAT for
February. Mr Brennan said, “this does not fully reflect improving market
returns.  Co-ops must lift prices by 3c/l at least to  33c/l + VAT to ensure
farmers, many of whom are still dealing with the financial consequences of
the 2009 income crisis, benefit from the real increase in market prices.”
“The average EU gross spot market price for butter has increased by over 7%
between January and February, while SMP prices have lifted by 9.95%, whole
milk powder prices by 10.5%, and whey powder prices by a whopping 24.7%.
The recent improvement in UK cheddar cheese prices represented a more modest
1.16% lift over the same period,” Mr Brennan said.
“End February spot quotes indicate that most commodity combinations can pay
well in excess of this, with butter/skimmed milk powder, whole milk powder
and cheddar cheese/whey powder gross returns all between 40c/l and 44c/l.
This augurs well for co-op returns as milk supplies begin in earnest,” he
said.