Commenting on the results of the 1st July GDT auction, IFA National Dairy Committee Chairman Sean O’Leary said European dairy prices had continued firming for over five weeks at this stage.
He said only two European operators trade through the GDT platform, and reminded all that well over 80% of Ireland’s dairy export are sold on EU markets, including the UK. Mr O’Leary said June EU market returns could and should sustain current milk prices.
“The GDT 4.9% price decrease reflects the volatility of quantities traded, with a 10,000t hike in the amount of powder traded through the platform relative to the previous auction, mostly made up of NZ WMP,” Mr O’Leary said.
“While the GDT auction provides a useful index which allows for international price discovery every two weeks, the fact is that little enough European and no Irish product trades through it. Our main market is the European market, including the UK,” he added.
“As things stand, European average market prices, which had been easing since January, have stabilised and started firming in the last 5 weeks. Average EU commodity prices reported to the EU Milk Market Observatory for 22nd June would return a gross 42c/l before processing costs for an Irish product mix,” he said.
“I am clear that June returns can and should sustain current milk prices, especially for the majority of co-ops which have cut their May milk prices,” he concluded.