Firmer Dairy Markets Justify at Least Maintaining Base Milk Price

IFA National Dairy Chairman Tom Phelan today (Monday) said lower global milk production and the quasi emptying of SMP intervention stocks had led to generally firmer global dairy markets, further reinforced last week by a 6.7% increase – the 5th consecutive lift – in the GDT price index.
This justifies, at the very least, Irish co-ops maintaining the base milk price for last month’s milk.

He added that those processors who cut milk prices in recent months should to reverse those cuts and ensure that the pay-out fully reflects market returns.

“EU milk output has fallen slightly in both November and December, and global milk output has slowed down dramatically. Together with SMP stocks now down to less than 1% of what they were at peak, the supply side has come a long way to meeting an admittedly quieter global demand growth,” he said.

“After a difficult year which squeezed dairy farmers’ margins spectacularly, and with expected continued increases in fertiliser and feed costs into 2019, it is essential that co-ops sustain the highest possible milk price that markets allow. For the short term, we believe this must mean at the very minimum holding their February price, with scope for more positive moves in the months ahead, should current trends continue,” he concluded.