Co-Ops must ensure dairy farmers benefit from dairy upturn
the GDT auction registers another small 0.2% rise today (Tuesday), IFA
National Dairy Committee Chairman Sean O’Leary called on co-ops to work
harder on passing
back as much of the dairy upturn as possible to farmers, who after two
years of challenging cash flow still have some way to go to rebalance
their farm finances.
the last two years, the majority of farmers have expanded and all have
joined the Sustainable Dairy Assurance Scheme (SDAS), at a major cost to
The 2016 Teagasc National Farm Survey showed 60% of dairy farms had
increased their average on-farm debt to €99,000. This has coincided with
a serious dairy price downturn from which farmers are only just
emerging,” Mr O’Leary said.
on last year’s supply pattern, there 50% of the year’s milk remains to
be produced between July and December. Every additional cent co-ops can
to farmers as early as possible in that period will make a vital
contribution to their financial situation, allowing them to catch up
with repayment commitments, including their merchant credit debt to the
co-op. It will also be due recognition for the commitment
made by farmers to SDAS, which co-ops owe them to leverage into better
markets and prices,” he said.
the talk of imbalance between butter and SMP prices, it remains a fact
that the overall returns from dairy commodities are at a high level. Not
are international dairy prices – as expressed through GDT – continuing
strong for the next six months, EU spot milk prices are at their highest
in four years at €43.3/100kgs (Italy) and €38/100kgs (Netherlands); and average EU commodity prices (9th
July 2017) continue to return a gross 40c/l – equivalent to a farm gate
price 35c/l + VAT after deduction of 5 c/l processing costs,” he said.
co-ops may still be dealing with some contracts signed at lower price
levels, those are progressively being replaced with contracts which
ensure reflect the current stronger price indices,” he said.