IFA National Dairy Committee Chairman Kevin Kiersey said that yesterday’s (Thursday) EU SMP intervention tender adjudication saw yet further increases in the prices buyers were prepared to pay for SMP out of intervention stocks. The EU Commission accepted bids for 15,400 tonnes at €2,500/tonne. He said this reflected developments on the market for fresh product, where prices as quoted by the Dutch Dairy Board for spot lots this week rose to €2,680/tonne. Butter and whole milk powder prices were also continuing to rise, with spot quotes of €3980/t and €3380/t respectively from the DDB.
Mr Kiersey said the Irish Dairy Board were sure to increase their February butter and SMP prices in early March, which would be the clearest signal yet to co-ops that further milk price increases are fully justified for February deliveries.
“Bids from buyers for intervention SMP were between €2,400/t and over €2,700/t this week, and the EU Commission decided to draw the line at €2,500/t – a price which is very close to current average fresh product prices,” Mr Kiersey said.
“Intervention stocks are being run down very rapidly, and at prices which are very substantially higher than the €1760/t at which the product was purchased during 2009,” he added.
“Since the beginning of the year, over 46,000t of SMP have been “destocked” and sold onto the market, without any negative price impact, leaving only around 50,000t for sale in coming weeks,” Mr Kiersey said.
“The reduction in the stock overhang and the strong prices at which the intervention SMP is being sold are clear indicator of very buoyant demand. It is quite clear that both the Irish Dairy Board and co-ops will be fully justified in lifting prices for February,” he concluded