ICMSA dairy chair Gerard Quain said the price announcements for April had again highlighted an “astonishing difference” between the West Cork co-ops and their larger counterparts both in Munster and elsewhere.
He said that taking the four-month peak period to June inclusive, a 400,000 litre supplier to, for example, Lisavaird is receiving “probably €6,500 more for their milk than their counterpart supplying to other processors up the country”.
“By July of last year, we estimated that the Lisavaird supplier had received €7,000 more than their counterpart supplying into the much bigger co-ops,” he said.
“We asked then how it was possible for such a difference to emerge for homogeneous products on a homogeneous market? We’re asking it again.”
Processors have said that dairy markets continue to be impacted by Covid-19.
Food service demand
Glanbia said such returns require an adjustment in milk price as restrictions brought in to help contain Covid-19 have decimated food service demand in multiple countries and severely challenged the dairy supply chain.
Lakeland Dairies stated that global dairy markets continue to feel the effects of the Covid-19 fallout.
It said the ongoing shutdown of the food service sector across Europe continues to cast a shadow on the global dairy markets.
“With milk destined for food service flooding into butters and powders, returns for all dairy products are back significantly with a weak European sentiment as a result of Covid-19 hampering any recovery. Butter and skimmed milk powder (SMP) prices are now at their lowest since 2016,” stated Lakeland.
However, Mr Quain pointed out that both Arla and Friesland-Campina will pay 31.8-32.4c/kg for May milk and those European giants are processors with very similar product profiles and even larger volumes than our biggest dairies.
