Low dairy prices are a six – eight month problem – Coveney
Low prices are not the norm for dairy markets and the industry is only facing a six to eight month problem, according to the Minister for Agriculture Simon Coveney.
Speaking on RTE Radio, the Minister said that people seem to be suggesting that these low prices are now the norm for dairy markets and they’re not.
The Minister also said that he is to go to Brussels next week, specifically to talk to Commissioner Phil Hogan about the issue of low dairy prices.
Minister Coveney said that there is no connection between the removal of quotas and the fall in dairy prices.
“The vast majority of farmers will tell you they’re happy that quotas have been lifted.
We were predicting last November that 2015 was going to be a difficult year for dairy prices. That was predicted by co-ops, by farming organisations, by me and my Department and so on.
“So, farmers were looking to 2015, in one sense with the excitement that quotas would be removed but also with anticipation that it was going to be a difficult year as regards price volatility,” the Minister said.
According to the Minister most farmers understand why that’s happening.
“We have a ban in Russia at the moment on all dairy products from the EU, China essentially over-purchased product for the last two years and have a lot of milk powder in store and so their purchasing of dairy products has slowed somewhat but its still growing.
“Price volatility in dairy markets is not new. Back in 2009 prices fell to 21c/L or 22c/L. For the last three years we’ve had very strong dairy prices, we’ve had the upside of price volatility where supply hasn’t kept pace with demand.
Many farmers were getting more than 40c/L for their milk. What we have at the moment is a difficult year that people like me and others have a responsibility to help farmers get through.
Speaking about the upcoming Special Council of Ministers on September 7, he said that it will be focused on dairy prices and how the Commission can use the tools available to them to help farmers get through a temporary difficult period.
He pointed out that the Commission has three tools that it can use, Intervention, aid to private storage and export refunds.
The Minister said that he knows it is a very difficult period for farmers and that it’s a worry for them.
“We will do everything we can to support them. People need to get this into perspective, this is a temporary crisis and problem in the dairy sector that will be resolved in time as markets improve.
“Unfortunately one in every five or six years we will see the downside of price volatility. Let no one be under any illusions the future for the dairy industry in Ire is strong and bright,” he said.