ICMSA says milk prices for farmers must reflect recovery

Gerald Quain said the rally in the last week of April has since picked up pace and industry standard indexes were now climbing upwards as food service rebounds and consumption is returning to normal. 

Quain said market data pointed overwhelmingly to a base price of at least 29cpl, which had to be the sector minimum price as indexes continued to climb and look set to pass pre-lockdown prices shortly.

“Certainly, farmer-suppliers will want to see the market situation accurately reflected in the price their milk processors will be paying,”​ Quain said. 

“The PPI has gone up by the equivalent of 0.5cpl in the last four weeks, while even that rise significantly lags the 5cpl that the spot butter/SMP went up by in the five weeks back to the start of May.  In addition, WMP went up by 0.5cpl over the same period and wherever we look – and whatever we look at – we see prices, indices and market rapidly regaining and moving very strongly back towards pre-Covid levels and demand. 

“Realistically, we want to see the reopening and recovery proceeding at a coherent and safe pace and that means prudence and proportion have to be the watchwords. But it also means that all milk processors must be paying – as a minimum – 29cpl for the milk supplied last month and that will mean that some processors will have to increase May milk price.” 

Quain said farmers have been patient and understanding of the unique challenges presented by the pandemic, but added milk processors could not ask farmer-suppliers to accept an artificially low price that is contradicted by weeks of hard market data.