Tuesday 25 September 2012
Rise in milk prices
Dairy markets have seen a sharp and sudden increase in recent weeks, with milk output now reported to be generating returns sufficient to increase farm gate milk price to around 31 cent per litre.
Town of Monaghan co-op this week confirmed a 1.2 cent per litre increase in their August milk price, while Glanbia last week moved up 1 cent and other processors are expected to make adjustments.
The Irish Dairy Board's Purchasing Price Index (PPI) jumped from 91.8 in July to 98 in August. Current returns would lift the index to 105, according to informed trade sources. Soaring global feed costs is seen as the main driver, with milk supply from the US and Europe showing recent weakening. However, New Zealand milk output remains very strong.
IFA National Dairy Committee Chairman Kevin Kiersey said that gross returns from European markets have increased by 9c/l to 37c/l for SMP and butter, and by over 6c/l to 35.5c/l for whole milk powder.
"Even allowing for processing costs, a farmer price of at least 30c/l plus VAT is very justifiable based on such returns," he said.
Pat McCormack, Chairman of ICMSA's Dairy Committee, said that the case for a milk price increase is stronger than ever - both from a market viewpoint but also given the massive pressures facing farmers at farm level.
"Farm incomes are going to take a hammering this year due to reduced product prices, escalating costs and disastrous weather and co-op boards must do everything possible to assist farmers at this time," he said.
Source: Argentine Beef Packers S.A.
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