The latest sales of SMP out of intervention now mean that 99% of product held there has now been sold and indicates a market that’s going to be positive in 2019, according to ICMSA Dairy Committee Chairperson, Ger Quain. Mr. Quain maintained that momentum had been building through all the intervention sales in the last quarter of 2018 as well as resurgent GDT results and that gathering market sentiment “had better” mean price increases in the coming months to Irish dairy farmers.
“Milk production growth has slowed across Mainland Europe and the lower global supplies we saw in Q4 of 2018 are set to continue for the first half of 2019. Milk is no different to any other commodity in terms of the supply-demand dynamic setting price and the tightening supplies are having an impact. We’re not surprised to see spot prices in the Dutch Quotations returning over 32cpl after processing and including VAT for the Butter/SMP combination. This is up 4 cents per litre since the start of December and reinforces the ICMSA view of a market that is increasingly ‘Bullish’. Similarly, the WMP returns are over 32cpl, up 3cpl in that same period. Butter price continues to remain constant, but attention is really on the significant rises in powders in the last quarter of 2018”, said Mr. Quain.
Pointing out that the main stumbling block for powder price increases had been the intervention stock overhang, the ICMSA spokesman pointed out that this factor had been removed completely from the equation with almost 380,000 tonnes of product sold out of intervention and only minimal stock left in storage. “That series of sales of SMP out of intervention has been rightly acknowledged by Commissioner Hogan as a success, but ICMSA is still advocating the retention of intervention at the minimum buying-in value and not a tendering system – we think that that, allied to an established and functioning Voluntary Reduction Scheme, would really put support under milk price. All in all, milk markets are moving steadily forward in a positive direction and this had better be reflected in the coming months with the Ornua PPI as the minimum starting point for that significantly better price”, he said.
Ends 28 January 2019
Ger Quain, 086-3623041
Chairperson, ICMSA Dairy Committee
Cathal MacCarthy, 087-6168758
ICMSA Press Office