The first green shoots of recovery for the Irish dairy industry may now be discernible, according to Strathroy Director Ruairi Cunningham.
“Three weeks ago I would have predicted an average base milk price of 27/L, including VAT, for the first six months of this year. But I am re-thinking that projection now in the wake of discussions I have had with dairy commodity traders over the last few days,” he said.
“They have confirmed a growing demand for Irish milk powder. And this may signal the start of a revival on international dairy markets.”
While acknowledging the recent strengthening of the prices paid on Fonterra’s Global Dairy Trade (GDT) auction, Cunningham also pointed out that the volumes of product coming to the market had been quite small.
“It suits Fonterra to be in a position to talk up the market on the back of what has happened since Christmas. In any event, it takes three months for GDT trends to be reflected in this country. So we will have to wait and see what the coming weeks bring.”
He also confirmed that the company is likely to pick up new farmer suppliers on an ongoing basis over the coming months.
“The enquiries keep coming in,” he said.
“It is very likely that we will agree supply contracts with a number of producers in the Wexford, Carlow and Kilkenny area prior to the beginning of April. We can quite easily double our milk output: the challenge is that of growing the volumes of milk which we can sell north and south.
Cunningham made it clear that the company is particularly interested in speaking to potential farmer suppliers along the east coast.
“This complements are current farm procurement and sales patterns,” he said.
“Once quotas go, there will be much more flexibility in terms of our dealings with new farmer suppliers.