13 Dec 2010
POSITIVE OUTLOOK FOR MILK PRICES IN 2011 – KIERSEYDairy
IFA Press Release
Issued by the National Press Office, The Irish Farmers’ Association
Monday December 13 2010
POSITIVE OUTLOOK FOR MILK PRICES IN 2011 – KIERSEY
Speaking today (Mon) at the IFA National Dairy Committee’s last meeting for 2010, Chairman Kevin Kiersey said that, despite the November easing in EU powders market prices, reflected in an adjustment of the IDB price index for butter and powder traded through them during that month, the outlook for dairy commodity, and therefore milk prices in 2011 was very positive. The IFA man encouraged all co-ops to put an end-year top up on the agenda for their December meeting.
“EU powder prices had weakened quite a bit during October and November, but they have started to stage a recovery with prices for SMP up around €200/t in recent days, while WMP has increased by around €300/t, and whey powder by around €90/t. Butter prices have remained at a relatively high level of around 60 to 65% above intervention, but somewhat weaker than at peak,” Mr Kiersey explained.
“This turnaround is due to much more robust global demand, particularly from Algeria and Asia, which is now expected to suffice to take up internationally increased milk supplies. European powders are very competitive on the world market, thanks to a weak Euro relative to the US$, and increased exports have created powder shortages on the European market. Furthermore, dear grain and feed prices will put pressure on further production increases in the US and many EU countries, while drought conditions are slowing down production in New Zealand,” he said.
“The prospect for milk prices in 2011, even allowing for the large stocks of intervention SMP, and the use of a sizeable amount in the stock-for-food-parcels EU Deprived Persons Scheme, is widely acknowledged by all in industry as being very positive,” he added.
“Co-ops must show their confidence and boost that of their suppliers, who are facing increased feed and quota costs, by exploring every option to pay an end of year top up for all 2010 supplies, and by committing to at least hold current milk prices well into 2011,” he concluded.