Milk Processors Must Maximise Milk Price This Spring

While milk prices reached record levels in 2022, the start of 2023 has seen a softening of global market prices for dairy produce.

However, IFA Dairy Chairman Stephen Arthur said that some of the talk by dairy processors has been overly negative. 

“At regional meetings across the country and via other communication channels, milk processors have been talking down the milk price, citing the global market downturn.”

“Sustaining milk price as we approach peak milk production has to be a priority for every milk processor,” he said.

“The processors were slow to pass on returns when the market was rising but have no problem telling farmers that they will drop prices immediately now that the market is softening,” he said.

“While global markets are challenging, yesterday’s GDT auction results were more positive.”

Yesterday’s GDT results from New Zealand have reported a rise in the index of 3.2%. This rise included a 6.6% increase in the butter sub-index. These results indicate a positive signal to the market following weeks of consecutive declines.

Input costs remain high, with the latest CSO figures showing that fertiliser prices are 94% higher than 12 months ago while meal is 33% higher.

“It is vital that our processors continue to support farmers in this high input environment. Our production costs remain high; therefore, we cannot sustain significant cuts to our milk price this spring,” said the IFA Dairy Chair.