Gdt Results This Week Coherent with Markets Stabilising

Speaking after this week’s GDT auction, IFA National Dairy Committee Chairman Sean O’Leary said it saw a 0.3% fall in the weighted average index for all products traded. However WMP prices continued their recovery, rising 1.6% compared to the previous auction – WMP is the product most traded through the auction by weight. Also, the products made available for sale were, as per usual, traded in 6 x 1 month contracts, spanning the December to May period, and prices for the last three months were well up on the previous auction – indicating at this early stage an expectation of some level of price recovery, admittedly from low levels, next spring.

“I believe this latest GDT auction is coherent with global markets starting to stabilise. It may however be some time before global markets return to balance and prices recover in a meaningful way,” Mr O’Leary said.

“Closer to home, the impact of the Russian ban continues to exacerbate weak markets. However, there is evidence that the APS scheme is now helping stabilise EU butter markets, with average EU butter quotes from the Milk Market Observatory unchanged for the last three weeks. Other commodities continue weak, however and it is clear additional measures are needed to help turnaround market sentiment,” he said.

“With new EU Agriculture Commissioner Phil Hogan now in office, IFA has renewed its calls for further market supports to be activated promptly to counter the continuing effect of the ban on EU exports to Russia. We believe a re-valuation of the “safety net” intervention level to better match up with production cost inflation, would send a strong message to international buyers. A targeted reopening of export refunds would help exporters locked out of Russia to find alternative markets. We also believe the 2013/14 €409m superlevy fine currently being collected around Europe must be fully utilised to support dairy markets. If implemented rapidly and decisively, we are clear that these measures would all help turnaround market sentiment,” he said.

“Finally, many European dairy farmers will be facing record superlevy fines which make little sense to them as they gear up for the end of quotas in a few months’ time. Commissioner Hogan must do what his predecessor refused to do, and actively foster the required political support from Member States to achieve what limited relief is attainable, by removing the butterfat corrector,” he said.

Mr O’Leary concluded that he hoped to soon meet with the new EU Commissioner Phil Hogan to discuss these issues face to face.