Processors have been accused of lagging behind other European countries when it comes to passing on milk price rises to farmers.
Worldwide markets have seen dairy fats surge, with butter, whole milk powder and cheddar all performing strongly since April.
The ICMSA’s dairy chairman Gerald Quain said farmers were expecting a price rise in the May milk cheque, with butter now sharply up at around €4,600/t on the Global Dairy Trade index.
“Returns have improved considerably and farmers need – and expect – to see these improvements in their May milk cheque, which is a key month for determining dairy farm income for the year,” he said.
The ICMSA said the GDT auctions have seen the index rise by 10pc over the last eight weeks, with the butter and skimmed milk powder returning 38c/l before processing costs.
Mr Quain said some co-ops and processors have been paying up to half a cent below the Ornua Purchasing Price Index for the first four months of the year.
“The difference between paying 31c/l and the stated PPI price for just the first four months amounts to over €2,500 on a farm that is supplying 350,000 litres a year. That’s a great deal of money to farmers still looking at a stack of 2016 bills,” he said.
Glanbia Ingredients Ireland’s Jim Bergin said the “very high price” for butter was “worrying”.
Source: Independent IE