Gerald Quain: 'Current market indicators highlight a demand for dairy products'
Early indicators of dairy markets in 2020 make for positive reading, according to ICMSA dairy chair Gerald Quain.
He said that the association anticipated a series of milk price rises as the market worked through the data and moved forward.
“Current market indicators highlight a demand for dairy products and we can see that very clearly in the recently published European Union Agricultural Outlook for 2019-30 Report published by the European Commission,” he said.
They’re reporting that a “large share of EU milk production growth is expected to go towards cheese processing“ and moreover they’re predicting that cheese production will grow from 10.8 million tonnes in 2019 to 11.5 million tonnes in 2030.
Mr Quain said that while consumption of liquid milk was declining across Europe, that was going to be replaced by exports to non-European countries which were expected to keep increasing in that time period.
The report says that population growth, increased frequency of purchases and the development of cooling systems will play an important role in increasing demand in Africa, while in Asia, income growth and changing consumption habits will drive an increasing demand for fresh dairy products and cheese.
“This all looks likely to more than compensate for any falls in liquid milk consumption, and, as these Asian and African patterns bed down and become more established we see the potential that’s moving markets and prices up,” he said.
At the start of Q1 2020, the increases in butter, powders and cheeses in the last quarter of 2019 will most likely continue and the first Dutch and European dairy quotations for 2020 are supporting that idea.
Dutch dairy quotations had remained strong and were returning 34.84cpl for the industry standard Butter/SMP mix and 36.35 cpl for WMP after processing costs are excluded.
“We think that we’re looking at a series of prices rises that bridge the lag that unfortunately was allowed develop here between the Ornua Index and farmer price and may well carry on into Q2 and increased production periods,” said Mr Quain.