Fonterra Turnaround Strongest Evidence That Markets Have Bottomed out

IFA President John Bryan today (Wed) said that the 13.5% average increase in the price of dairy products traded through yesterday’s Global Dairy Trade (Fonterra) auction was very strong evidence that, after signs of recovery on EU dairy commodity markets, world dairy markets were now also starting to pick up.

“Ireland is particularly well placed to benefit from the growing recovery, in light of the extra competitiveness the weak Euro is giving us. This should give co-ops further confidence and encouragement to hold their May milk prices,” he said.

Commenting on the auction results, IFA National Dairy Committee Chairman Kevin Kiersey said: “It is particularly positive that butteroil prices (AMF) – the only type of butterfat traded on the auction – are up on average by 24.4%, and for the first month of trading by a whopping 43.6%. SMP has also recovered in a major way, with the overall average price up by 21.3%. Whole milk powder, which makes up the bulk of the quantities traded, is also up by a meaningful 8.5%, while all other products bar lactose have recorded price increases. These are the first tangible signs of real recovery in global dairy markets, and this is extremely good news for the Irish dairy sector, and for Irish farmers.”

“The timing of the auction was crucial: most co-ops will be deciding on their May milk price over the coming week, and I would urge them to take encouragement from this latest very positive signal as yet another reason why they need to act prudently on 2012 milk prices,” he added.

“The National Dairy Committee, with support from their County Chairmen and officers, are currently engaged in an intense series of lobbying sessions with co-op board members at county and regional level. As part of our campaign, we have published a list of ‘10 good reasons why co-ops should hold their May milk price’ – the massive turn-around in the Fonterra auction is an extremely convincing reason number 11,” he concluded.