‘I wonder if people realise 2015 will be the most brutal for milk prices since joining the EU’
Irish dairy farmers are facing into the most brutal year for milk prices since Ireland joined the EU, according to Michael Murphy, one of the organisers of the January Positive Farmers Conference.
He said that while 2009 was a tough year, with 2015 it is impossible to be even a shade of optimistic about price before the last quarter and he warned that there will be a lot of attrition.
However, he said that the medium- and long-term outlook for dairying and milk prices is positive and key to Irish dairy farmers surviving will be exploiting their comparative advantages.
This year is the 16th Positive Farmers Conference and it takes place over two days in Clonmel on January 14 and 15.
“We are trying to arm people with good information. We are not holding a conference to make a profit, but to give value to people.”
Irish dairy production costs are 1.5 times those of the US, if we were to buy the same inputs as the US dairy farmer does, he said, hence the importance of comparative advantage Irish dairy farmers have with a long grass growing season and the skills we have in this country.
“Exploiting this advantage is key.
“Our central message is that if Irish farmers really exploit their comparative advantage they will be less likely to be cut off at the knees.
“It’s a grim message but I believe it. We have a basic supply/demand problem and it doesn’t look like the demand will solve it anytime soon.”
Putin, oil prices and Chinese demand are just some of the key issues affecting milk prices he said and change will come on the supply side.
“The key point is to understand what is happening and that, on balance, things are pretty positive. The outlook, taken over time, is positive but it’s a grim year. It’s a year that if you don’t need to spend don’t do it.
“It’s a year to get through and I wonder if people realise it will be the most brutal price year in our history. I firmly believe that people are better off if they understand that, so they are tough in terms of spending decisions for the year.”
However, he said he’s not in the slightest bit pessimistic about the medium and long term future in dairying.