Liquid milk suppliers price push
LIQUID milk suppliers across Galway are hoping that the rising curve in world prices will help the IFA to negotiate an improved winter deal for their produce.
Last week, the IFA’s National Liquid Milk Chairman – John Finn from Oranmore – said that studies carried out by both Teagasc and FDC Accountants indicated that producers needed an average price of 40c/l over the year.
There are approximately 50 liquid milk suppliers in the Galway area, split between Arrabawn and Aurivo co-ops, the latter having about 18 suppliers in Galway.
Liquid milk is far more expensive to produce during the winter months due to feed costs while cows in the ‘liquid herds’ tend to produce more quantity than high butterfat milk thus reducing bonus payments during the summer months.
The recently announced EU milk reduction scheme will also be of little benefit to the liquid producers, who are tied into contracts over the winter season.
In the past, the co-ops handling liquid milk contracts, operated a six month bonus system for the winter period but this has now been reduced to four – November through to the end of February.
According to John Finn, liquid producers would need a winter price of 55c/l to reach the viability figure for the year of 40c/l.
“Liquid milk producers are facing the most expensive time of year to produce milk, and like all other dairy farmers they have already made significant losses over the summer as milk prices remain well below production costs.
“Last year, with the end of quotas, insufficient margins encouraged farmers to calve fewer cows in autumn (16% fewer dairy calves) when overall dairy calvings for the year were up 8.5%. This year, farmers will want to consider their options to avail of the EU milk production reduction scheme for the milk they have been supplying over and above their liquid milk contracts over the winter months,” said John Finn.