Meath IFA Chair calls on co-ops to match 40c/L EU milk prices
MEATH IFA Dairy Committee Chairman Kevin Clare said communications in recent days with some of his European counterparts have indicated that milk prices paid in some parts of Europe were already exceeding 40c/L, with more price increases expected.
He said this vindicated his call for an Irish milk price of 40c/L plus VAT for August milk. Mr Clare said: "My European colleagues in Germany, Austria, the Netherlands and the UK have indicated that the processors best able to pay well over 40c/L are those with strong commodity elements in their product mixes. Most of our co-ops are in that position.
"Austria's largest milk processor, Bergland, are paying 43c/L for August milk. In Northern Germany, a large number of processors are paying base prices net of VAT between 39 to 43c/L, while further South, German processors pay up to 35.3c/L. Dutch processors are paying an August milk price of 42c/L.
The IFA Dairy Chairman said even British processors, who have historically paid the lowest price in the EU-15, are now benefiting in a major way from liquid milk and cheddar cheese price increases, and will be paying 37c/L next month.
"Our co-ops are clearly better placed than most around Europe to benefit in terms of returns from the current commodity-led market boom. They can easily afford to pay 40c/L plus VAT for August milk," he said.
Meanwhile, Dominic Cronin, Chairman of ICMSA's Dairy Committee, said: "ICMSA firmly believes that the milk price paid by co-ops must reach 40c/L for August milk exclusive of VAT. This figure is entirely reasonable based on the latest Irish Dairy Board on-account price and, even at that, co-ops would be making substantial profits given that the Irish Dairy Board on-account price is over 48c/L at the present time.
"There is a growing suspicion amongst farmers that the co-ops are now making very substantial profits at the expense of their suppliers and unless the ICMSA target of 40c/L is achieved, this suspicion will continue to grow. Indeed, the profit announcements in recent weeks by our PLC milk processors clearly show that they are doing very well this year.
"In addition, co-ops should not be using VAT to make their milk price look better. The VAT rebate is compensation paid to farmers by the National Exchequer for the VAT paid on inputs and co-ops should clearly state what their price is exclusive of VAT - that is the real price being paid by co-ops."