Take Fonterra Auction Results with a Pinch of Salt: Our Main Export Markets Are in Europe

Commenting on this week’s GDT auction results, which saw a further 8.9% fall in the average price of traded commodities, IFA National Dairy Committee Chairman Sean O’Leary said the main markets for Irish dairy exports were the UK and Europe, where prices were holding up well at still quite high levels, which should underpin current milk prices for some time yet.

He also reminded those co-ops that had failed to do so to pass back to farmers the full 5% VAT refund on January and February milk.

“The UK and Europe are our main export markets. While the GDT auction offers an important, if partial insight on global dairy market developments, current European average dairy prices are more directly relevant to Irish milk prices,” Mr O’Leary said.

“European dairy product prices reported to the EU Commission on 23rd March would return gross milk prices of 45.22c/l for SMP/butter and 46c/l for WMP, while cheddar cheese and whey powder would return 46.9c/l before processing costs,” he said.

“It is clear that the global milk output is rising, and that markets are easing. However, current high levels of milk prices in Ireland and around Europe continue to be sustained by still historically high European commodity prices,” he concluded.

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