IFA National Dairy Chairman Kevin Kiersey today said farmers should be aware that, while dairy markets returns have come down from their 2011 peak, the outlook for 2012 remains reasonably good.
Just as Dairygold said they would hold their price until March at least, Mr Kiersey urged the Glanbia board members to rollover the 0.95c/l + VAT which had been promised until the end of December, as per a decision made last July. He added that such a gesture by Glanbia would generate considerable goodwill among farmers.
“There are many more reasons to be positive about the dairy outlook for 2012 than there are to be negative. Undoubtedly, global demand has slowed down in the latter half of 2011 due to the economic downturn, and together with strong supply growth, this has weakened commodity prices from their high 2011 peak,” he said.
“However, despite the global economic challenges, demand has thus far kept up with supplies, there has been no major stock build up, and commodity prices, though easier, remain at historically strong levels,” Kevin Kiersey said.
“Signals from the first January Fonterra auction were positive, with overall weighted prices for products to be traded all the way to September 2012 up 1.5%,” he added.
“I am clear that all co-ops can at the very least hold milk prices for spring before taking a longer view on milk price trends. Indeed, Dairygold have already indicated they would hold their milk price at least until March,” he said.
“In this context, I urge Glanbia board members, who will be meeting in coming days, to rollover the 0.95c/l + VAT they had decided last July would last till 31st December,” he added.
“Glanbia is clearly in as good a position as Dairygold to sustain their price at December 2011 level at the very least for the spring,” Kevin Kiersey concluded.