There has been some progress regarding fixed milk-price schemes, this is according to the Irish Creamery Milk Suppliers’ Association (ICMSA). Kerry ICMSA executive, Pat McCormack who was speaking at a meeting held earlier this week and said that suppliers who signed up for contracts in good faith at between 30c/L and 32c/L “are well short of the mark” on current milk prices. He added that the ICMSA has advised farmers to enter such contracts with caution, and adds that the scheme was “never there to beat the market”.
McCormack additionally acknowledged that the body foresaw the increase in costs for feed and fertiliser, which has impacted production costs. A farmer attending the meeting asked if war is considered a “force majeure”, adding that it would be “unethical” to hold struggling farmers to the fixed-price contracts.
Another milk supplier claimed that such contracts were encouraged by banks in a bid to de-risk farm investment. One farmer said he was aware of suppliers who have 100% of their milk in fixed-price contracts. McCormack said that the schemes were never meant to have such large volumes of milk. The ICMSA president said that he highlighted the plight of struggling suppliers in meetings with Ornua.
The ICMSA president also told the meeting that early spring figures show a 1.5% drop in global milk supply. He said that while the supply remains negative “it will be a huge ace in our hand”. McCormack predicted that milk price will be in excess of 50c/L for the peak milk supply months and beyond.