Milk prices

Farm groups point to continued milk rise increasing confidence

Tipperary Star reporter


Tipperary Star reporter


Farm groups point to continued milk rise increasing confidence

The country's two main farm organisations have expressed confidence that milk prices will continue to rise in 2017.

The ICMSA expects to see a 2017 milk price recovery, while the IFA said it expected that the continued milk price increases since July of between 5cpl and 7.5cpl had improved the confidence of Irish dairy farmers coming up to Christmas.

A spokesperson for the ICMSA told the Tipperary Star that they wanted to see “meaningful progress” made by the Commission on the ongoing scandal of unfair trading practices engaged in by food and retail corporations.

“Now that the credibility and impact of the Voluntary Reduction Scheme has been established beyond doubt, ICMSA wants this added to the normal policy ‘toolbox’ and automatically triggered once milk price falls below costs of production for a set period,” they said.

The spokesperson said that the prolonged and deep price trough from which we’ve only recently emerged was made even more damaging by the complete inadequacy of the Commission’s response and the incomprehensible delay in realising the depth of the milk price fall (around 45 per cent from peak to trough in our case) and then the prevarication in introducing the Voluntary Reduction Programme which, as ICMSA was alone in pointing out, was the only supply-management tool with sufficient firepower to give the necessary degree of certainty to the market.

“ICMSA advocated the supply-reduction scheme in the face of entrenched opposition and widespread scepticism and we derive no satisfaction from being proved right on milk price yet again,” they said.

The association said it cannot again even countenance a situation such as that endured for the last 20-odd months where everyone from the farm gate onwards saw their dairy margins and profits increase while the dairy farmers – on whom the other elements in the food-supply chain completely rest – were wiped out.

Improved confidence

Meanwhile, the IFA national dairy chairman Sean O'Leary said that continued milk price increases had improved the confidence of Irish dairy farmers coming up to Christmas, but many bills remained to be paid, and cashflow concerns remained a top preoccupation, according to the IFA.

However, Mr O’Leary said he was optimistic for the 2017 dairy market outlook, but bearing in mind the financial pressures still on farms, urged dairy farmers to prepare early in January to fully utilise the new SBCI / State -funded low cost (2.95 per cent) cash flow loans IFA pressed for, which Minister Creed had stated will become available from the pillar banks and other lenders early next month.

These will allow farmers to convert merchant credit, superlevy and other bills and make them more manageable.

“Irish co-ops have increased their milk prices by an average of 5.5cpl in the last five months, and I am clear that there is scope for further increases in the coming months,” said Mr O'Leary.

“With dairy markets remaining strong, there is scope for further milk price increases for Irish dairy farmers for this month’s milk and the coming months,” Mr O’Leary said.

The chairman described the outlook for dairy and milk prices in 2017 as “positive”, with global milk supplies unlikely to increase in response to improved milk prices over the medium term.

“Many farmers had been financially crippled by up to three years of low milk prices in all regions bar the US, and cow culls in the EU have increased by over 7.5 per cent this year to date,” he said.

Mr O'Leary said that global demand had also remained robust, with strong demand for butter and cheese in particular in developed countries. “It is crucial that co-ops would continue passing back as much as possible of the benefits they are gaining from improved dairy prices,” he said.