Stability in Prices as Idb Index and Fonterra Auction Price Unchanged
IFA National Dairy Committee Chairman Kevin Kiersey has said that there was clear evidence of international dairy price stability, despite concerns over increased global milk supplies. He said the absence of change in the IDB index for October and the weighted average auction price reached for the various commodities traded through the first November Fonterra auction this week pointed to this.
He urged all co-ops to reflect this stability by now announcing they will hold prices at least to Spring, and to each evaluate the scope for a 13th payment or an end of year top-up for 2010 supplies.
“The IDB index has remained unchanged for October, indicating a stability of returns on EU markets, despite recent slippage in top spot prices. The results of the first November Fonterra auction held yesterday also show international dairy price stability, with quasi static powder prices – no change for whole milk powder, and a small 1.1% fall for SMP – and a 4.5% increase in butterfat (AMF) prices,” Mr Kiersey said.
He said, “Many dairy farmers are still clearing last year’s bills, and all are now facing massive increases in feed costs. If we are to sustain dairy farmers’ confidence for the future, it is critical to maintain stable, viable milk prices, and the first step to underpin this confidence is for co-ops to declare they will hold prices until spring at least.”
He added: “Over the summer, co-ops have collected significantly more milk which market returns at the time would have allowed them to pay for at prices at least 1c/l higher. They must re-examine the buffers they have accumulated, with a view to paying a 13th payment or a bonus/top up on the year’s supplies,” he concluded.