Kerry Holding May Milk Price Vindicates IFA Analysis – O’leary

FA National Dairy Committee Chairman Sean O’Leary today (Tuesday) said the decision by Kerry to hold their May price at the April level showed clearly that it could be done, as IFA had evidenced in its analysis of May market returns.

“In this context, the decision by Glanbia, Carbery and Lakeland to cut their May milk prices is all the more disappointing for milk suppliers,” he stated.

“While it is clear that market returns have come back from their peaks of early this year, it is important that dairy farmers, under serious cash flow pressure with superlevy and merchant credit bills, would be in a position to optimise their incomes at peak – and this has not happened in previous market upturns,” he said.

“Milk price adjustments in 2014 must be absolutely minimal. Northern Hemisphere supplies are past peak and the Oceanian 13/14 season has ended. There is now a seasonal lull in which market prices have stabilised, and even firmed somewhat, with demand picking up in some regions,” he said.

“The most recent information available from the EU Milk Market Observatory shows that the raw milk spot prices in Italy and the Netherlands have been increasing for the last three weeks. Butter and SMP prices were up 0.6% and whey powder by 1% in the week beginning 8th June, reversing the trend of previous weeks,” he said.

“Futures markets are also showing a market expectation of steady to firmer dairy prices towards the back end,” he added.

“In this context, and bearing in mind the need to keep farmers’ goodwill and confidence intact, I urge all co-ops that have yet to decide on their May milk price to follow the Kerry example. I further urge all co-ops to minimise any milk price adjustment for 2014,” he concluded.

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