AGAINST a background of the most recent developments in international markets, Mr. Pat McCormack, Chairperson of ICMSA’s Dairy Committee, said that Co-op boards now have absolutely no excuse whatsoever for not moving immediately to announce a minimum March milk price of 34.5 cents per litre minimum based on the returns from the marketplace.
The ICMSA Dairy Chairman quoted a considerable body of evidence in support of his argument.
Dairy markets have seen a rapid improvement since December 2010 and the following are a number of indicators that clearly highlight these improvements:
. The Global Dairy Trade Auction price has increased by 24 percent between 1 December and 1 March.
. The Dutch Dairy Quotations have increased as follows between 2 December 2010 and 23 March 2011.
· Butter price up €540 per tonne.
· WMP price up €600 per tonne.
· SMP food quality up €460 per tonne.
· SMP animal feed quality up €290 per tonne.
· Whey price up €120 per tonne.
. The milk price equivalent of the Dutch quotation price for butter/SMP is now equivalent to 41.6 cents per litre before processing costs are deducted and VAT is added.
. The milk price equivalent of the Dutch quotation price for WMP is now equivalent to 42.4 cents per litre before processing costs are deducted and VAT is added.
“It is also important to note that dairy farmers need these price increases simply to stand still given the rapid increase in the prices of key farm inputs. We have once more the situation where these input costs – particularly fuel and fertiliser – are actually overtaking the prices rises that are so slow in arriving. In order for these strong market conditions to put any kind of a dent in farmers’ debt we will require the Co-ops to pass back a price that reflects the real strength of the markets and to do it immediately rather than allowing this kind of inexcusable ‘price and time lag’ to develop between what they get paid and what they pay their milk suppliers. They can demonstrate that they understand this necessity by announcing a substantial price rise for February”, concluded Mr McCormack.