IFA National Dairy Committee Chairman Sean O’Leary said today’s modest 1.4% GDT price uplift is a welcome change in recent trends, and reflected a significant 5.5% recovery in WMP prices.
He said that while he would not overstate the situation on the basis of a single auction, he hoped that this, together with the major 51% January uplift in Chinese dairy imports (see below) were hopeful signs, which might help change current global dairy market sentiment.
“While these are encouraging signs, milk prices remain hugely challenging for farmers’ cash flow. Co-ops, banks, Teagasc and other stakeholders must continue supporting farmers by holding milk prices, providing budgeting assistance, and practical advice on how to cut costs without harming the sustainability of herds and farms,” he said
Mr O’Leary reiterated his call on Minister for Agriculture Simon Coveney to reconvene the Dairy Forum urgently before the next EU Agriculture Council of 14th March, at which measures to help with the current dairy income crisis are to be agreed.
“To make an immediate impact on cash flow, the EU must allow an exceptional extension on Superlevy repayments. Also, Minister Coveney must immediately press for the announcement of a fundamental review of the intervention system, including an extension in full price buy-in. We also need all penalties removed from the long term SMP APS, and the reallocation of unused national amounts for cheese APS must be speeded up. Finally, the Commission must reduce obstacles on Member States, from State Aid Rules especially, to enable them to assist farmers with their challenged cash flow, including through innovative tax measures such as proposed by IFA.
“While some of our European fellow-farmers have already felt the pain very severely, Irish farmers will be receiving their first significant milk cheque within the next two weeks. Despite no fall in base milk prices since November, their cheque for February milk will be massively depressed by low constituents and lower volume, and their cash flow will be further challenged by higher feed expenditure,” he said.
“If the Commissioner means business, he has ways of impacting cash flow and markets rapidly through supports. However, he must also resist ill-thought out suggestions that, despite the openness of EU dairy markets to volatile global markets, EU production management might be brought back to make any kind of impact on international dairy commodity prices,” Sean O’Leary concluded.
IMPORTS OF DAIRY PRODUCTS INTO CHINA – JANUARY 2016 V. JANUARY 2015
Source: CLAL based on GTIS