Commenting on the new IDB index, IFA National Dairy Committee Chairman Kevin Kiersey said it had the potential to provide more information than the previous IDB SMP/butter index, because it reflected the full portfolio traded by the IDB, both commodities and higher value products.
However, the IFA man said: “Time will tell the value of this new index, and IFA will stay in communication with the IDB to maximise its information value. However, IFA will continue to inform dairy farmers just as comprehensively as before, as we have access to many sources of market intelligence in addition to the IDB – and our information currently clearly shows that markets are improving, and that a small milk price increase is justified.”
“I understand the commercial sensitivities which have led the IDB to make this change, and I believe this more comprehensive index, given access to additional market information which IFA will continue to have, has the potential to give more, not less, information for farmers.”
Mr Kiersey added: “We have also secured greater timeliness in the publication of the index, which at our request will be published on the 5th rather than the 10th day of the month.”
“However, the departure from an information flow which could relatively easily be converted into cents per litre, to be made relevant to farmers, will be challenging. In particular, I would be concerned that the new index should not be used by co-ops to muddy the water on milk prices and confuse farmers,” he said.
“We will continue to be able to ascertain the returns from the main commodities and commodity combinations on European and international markets, which are the markets the IDB competes on, and we will continue to communicate this information to farmers in cents per litre as we have been doing previously,” Mr Kiersey concluded.