Jan 202015

The EU and world price for dairy products are showing positive signs in the last month and while these indicators are very welcome – as is the decision of many Co-ops to hold December milk price – the real test will come from February onwards when cows calf down and farmers need to have a reasonable milk price in order to ensure a positive margin for 2015 with the April to July period absolutely critical, according to Pat McCormack, Chairperson of ICMSA’s Dairy Committee.  In that context, Mr McCormack was critical of the recent decision of the Irish Dairy Board to reduce its index by a substantial 5.1 basis points following a succession of reductions – the ICMSA spokesperson said the decision was causing concern amongst the  state’s milk suppliers many of whom  have not even begun to milk their cows yet.

The ICMSA Dairy Chairperson acknowledged that dairy products have had a very difficult six months but he noted that the Global Dairy Trade index figures for the last two sales have seen the overall index increase by 2.4 and 3.6% respectively. Moreover, he noted that when you look at the individual commodities that make up the index you can see there has been significant positive movement in butter, cheddar, casein and fats.  Butter has increased in five of the last six sales and is up over 40% in that time since the start of October 2014.   Cheddar has also seen gains but not to the same extent as butter, it is currently running 13% ahead of its lowest point in November 2014.

“Dutch Quotations have also gone up in the last few weeks with increases across the board in the most recent returns – butter led the way with a 3% increase recorded”, said Mr McCormack.

ICMSA felt that stability was returning returned to dairy markets and a recovery may be under way.  In addition, serious investments at processor and Irish Dairy Board level have been made with the promise to farmers that they will deliver during periods of market weakness.  The Irish Dairy Board, in particular, will be expected to deliver for farmers in 2015 but the current reductions in the Price Index do not inspire confidence.

“When markets were rising, farmers were told that Irish prices couldn’t rise as fast as we had to buffer the customers we supply, the very same principle needs to be applied now in reverse and our prices must not fall to the same extent”, concluded Mr. McCormack.

Ends      20 January 2015.

Pat McCormack, 087-7608958