According to Kerry, the price reflects what the market is returning for the scheme period. Photo: Clare Keogh
Kerry has offered its milk suppliers a forward price scheme at 33.5c/l (Vat inclusive) for March to October 2024. The price has been described by ICMSA as “depressingly and questionably low”.
Kerry, in a statement to the Farming Independent said the forward price scheme is based at 3.3pc protein and 3.6pc butterfat, and includes the Feed and Fuel Price Adjuster, which helps limit participants’ exposure to inflation in input prices during the period of the scheme.
“This added feature provides farmers with protection against unforeseen increases in compound feed and energy prices and ensures greater stability in their financial planning. The scheme offer price reflects what the market is returning for the scheme period.”
ICMSA president, Pat McCormack, said the offer was “depressingly and questionably low” and brought into sharp focus the classic inputs/price squeeze that wrecked farmer income as recently as 2016.
He said that ICMSA could not and will not accept a situation where farmers are expected to sign up for a scheme that gives them a price for their milk that is demonstrably below the costs of producing that milk. where farmer “milk price falls below the costs of producing that milk and farmer incomes are wiped out for a prolonged period.
“The difference this time is that the option of trying to increase production to make up on volume what we are losing on margin will no longer be there.”
Last week Lakeland Dairies announced another cut to its milk price for July supplies, which “represents market conditions” with global dairy demand remaining sluggish.
In a statement, the processor announced that the Lakeland Dairies Board has decided on a price for milk supplied in July which it said “represents market conditions”.
A price of 35.5c/l (3.6pc butterfat and 3.3pc protein) will be paid for July milk in the Republic of Ireland. This represents a reduction of 1.85c/l on the June price.
In Northern Ireland, a base price of 28.5p/l will be paid for milk supplied in July. This represents a reduction of 1.5p/l on the June price.
“This weak demand is being met by resilient milk supplies in many of the larger production areas, resulting in a continued imbalance between supply and demand,” the board said.
“Subdued sentiment from international buyers is being heightened by an economic slowdown in many parts of the world, particularly China and Asia.”
