Co-ops must plan for realistic increases as markets improve – O’Leary

IFA National Dairy Chairman Sean O’Leary called on all co-ops, whose boards will meet in the next two weeks to decide on the milk price, to take stock of improving market returns and acknowledge the worsening severity of the cash flow situation for an increasing number of their members. 

  He said this should lead co-op boards who held the June milk price to build on positive market developments and plan for realistic milk price increases to return market improvements in coming months.

  “We have acknowledged over the last number of months that co-ops have supported milk prices somewhat above market returns. However, in the last 10 weeks alone, we calculate that EU average returns for the main commodities relevant to the Irish product mix have improved by 4 cents per litre. With a slowing EU milk output, falling in some of the most important member states, underpinned by increased cow slaughters and negative profitability on most farms, we believe this trend will continue over the coming months, and into 2017,” Mr. O’Leary said. 

  Mr. O’Leary went on to conclude: “It is now quite clear that the tide has turned on dairy markets and that we are looking at a recovery. It may be slow and it may take some time to translate into sufficiently improved milk prices to address the current dire cash shortages on farms, but it must be reflected by co-ops in their pricing plans in coming months. Farmers need the extra few cents to pay bills, and to rebuild their badly shaken confidence.”