Commenting on the current milk price situation, Mr. Gerald Quain, Chairperson of ICMSA’s Dairy Committee said that now is not the time for knee jerk reactions from dairy processors in relation to milk price and they should hold the January milk price in response to a number of positive market developments in recent weeks. In particular, the last two GDT’s were positive, the drought in New Zealand is definitely having an impact on their production levels, Dutch dairy quotations have begun to move in a positive direction while SMP prices in the USA have increased substantially according to the latest report from the EU Milk Market Observatory and increased oil prices are likely to lead to increased demand for dairy products.
Looking at markets in detail, the 4.9% increase in the most recent GDT auction was achieved by increases in all products sold with butter, SMP and WMP achieving over 5% gains. European quotes for butter are holding strong having slipped from their highs of late summer but remain at a historically high level in the mid €4,000 per tonne range. Demand for dairy products is positive across Europe and globally and with oil prices strengthening, demand should be sustained.
Balancing all the above, Mr. Quain stated that milk processors are in strong position to hold milk prices at least for the first quarter of 2018 and then review the market in light of supply and demand developments. Given that it is the start of our production season, ICMSA is firmly saying that Co-ops should not take knee jerks decisions and should adopt a wait and see approach given recent positive developments in the marketplace, concluded Mr. Quain.
Ends 30 January 2013
Gerald Quain 086-3623041
Chairperson ICMSA Dairy Committee
ICMSA Head Office 061-314677