The Irish Farmers Association has said that the dairy outlook for Spring in 2019 is more positive than some co-ops are suggesting.
While Brexit and international trade wars are creating some uncertainty, IFA National Dairy Chair Tom Phelan said there were many signs that dairy markets will be tighter and prices firmer into the spring of 2019.
The farmer representative group highlighted the Rabobank last Dairy Quarterly report for 2018, which said that dairy markets could move quickly upwards and catch buyers unaware in the first half of 2019.
According to Phelan, this should encourage co-ops to hold milk prices at current levels till spring.
Tighter Production
“Global milk supply growth is slowing down and coming back in tune with the current steady demand growth. Rabobank shows that output from the big seven export regions (EU, US, NZ, Australia, Brazil, Argentina, and Uruguay) is slowing dramatically at year end. EU supplies, in particular, will be affected well into spring by weather-related impacts on feed/fodder quantity, quality, and cost,” he said.
“The evidence is already there that France, Germany and the Netherlands, which between them account for 46% of EU milk production and 51% of exports, are producing far less milk at year-end, and even for the full year compared to 2017.”
He highlighted that the market is seeing a fast reduction in the quantities of SMP held in intervention stock, which until recently had depressed the market.
He added that the minimum prices that intervention SMP is being sold at is fast catching up with fresh feed-grade powder prices.
“I believe there are very good reasons to expect a positive start to 2019, and I call on all co-op board members who have yet to meet to decide on November milk prices to make a firm decision to hold them at current levels into spring,” he concluded.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.
