There’s good news for dairy farmers in Clare as milk prices are set to increase in 2019.
The forecast from the ICMSA comes as a positive trend in December showed a 2.8% jump in prices.
The organisation’s Dairy Committee Chairperson Gerald Quain has indicated that the upward tick is expected to result in a rise in farmer milk prices.
The ICMSA was very critical of the processors who cut the November milk price in defiance of what the farm organisation said were a raft of positive market developments and a PPI that did not justify a price cut.
Mr Quain said: “The strong sales out of Intervention are, we think, very significant for dairy markets as we set off into 2019. The stock overhang of SMP has been massively reduced with over 270,000 tonnes sold out of Intervention in 2018”.
He continued: ”Looking at markets in detail, the 2.8% increase in the most recent GDT auction was achieved by increases in all products sold with butter up 3.9%, SMP increasing 7.9% and WMP achieving 1.2% gains. These improvements in the GDT occurred after falls over the course of 2018 but, more importantly, they came at a time where New Zealand has increased milk supply over their production season. Dutch Dairy quotes for butter are holding strong having slipped from their highs of late summer, but they remain at a historically high level around €4,000. The critical change is in the value of SMP where quotes have risen to their highest prices since mid-2017, while WMP has also seen improvements in the last six weeks to counteract falls in the Autumn. Milk supplies within the EU have seen collections in October 2018 0.4% below October 2017 resulting in 52,000 tonnes less milk produced and with 2019 EU production expected to only marginally increase by less than 1% our expectation is that this – along with fodder supply uncertainty across the continent – will mean that buyers are a little more anxious to secure supply and that should feed-back by the end of Q1 into a higher farmer milk price”.
While waiting for the prices to feed-back to the farmer-suppliers, Mr. Quain called on processors to hold milk prices at least for the first quarter of 2019 and then review the market in light of supply and demand developments at that stage.
“We’d be confident that by then it will be obvious that a price rise is justified but, in the meantime, we just cannot see why processors would even consider not holding price and we’d be extremely angry if they weren’t willing to wait the few weeks till the market data confirms absolutely what’s already obvious – markets are moving upwards and prices will follow” he concluded.