Idb Index Latest Indicator That Strong Market Recovery Justifies Higher Milk Prices – Kiersey
IFA National Dairy Committee Chairman Kevin Kiersey said the increase in the Irish Dairy Board index for August was the latest evidence that European and international dairy market recovery was now well and truly under way. The IBD index increased from 91.8 in July to 98 in August, reflecting the improvement in SMP and whey proteins.
Kevin Kiersey said, “Coming on the back of the latest Fonterra auction, which was up 6%, this makes a very strong case for an increase in milk prices as soon as possible”.
“Falling milk supplies due to weather factors, high feed costs and low milk prices had started impacting on international markets in late May, and global commodity prices are now rising strongly enough to justify a fundamental turnaround in co-ops’ milk price plans for the rest of the year.”
“Hard-pressed dairy farmers need to return to profitability as soon as possible, and with continued bad weather and dear feed, only a lift in milk price will help them do so. Co-ops will benefit from stronger dairy commodity prices as current spot trends become more generalised, and they can and must implement milk price increases as soon as possible,” Mr Kiersey said.
“There is very real scope, to say nothing of the very strong need on farm, for action by co-ops to return milk prices to profitable levels as rapidly as possible. I therefore urge co-op boards to start immediately to budget and plan for price increases to ensure farmers, whose profitability has been decimated by severe price cuts, feed cost increases and weather-induced fodder shortage, can look with confidence, not just to the year-end but also to the longer term future,” he concluded.