The early indications for dairy markets in 2020 justify a “series” of milk price rises, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).
Ger Quain, the association’s dairy chairperson, argued that the markets “make for positive reading”, adding that the ICMSA anticipates a number of price increases “as the market works through the data and moves forward”.
“Current market indicators highlight a demand for dairy products, and we see that very clearly in the recently published European Union Agricultural Outlook 2019-2030 report,” Quain highlighted.
The [European Commission] is reporting that a ‘large share of EU milk production growth is expected to go towards cheese processing’ and moreover, it’s predicting that cheese production will grow from 10.8 million tonnes in 2019 to 11.5 million tonnes in 2030.
“While consumption of liquid milk is declining across Europe, that’s going to be replaced by exports to non-European countries which are expected to keep increasing in that time period,” Quain also argued.
The ICMSA dairy chairperson also pointed out that the European Commission’s report predicted that population growth in Africa, and changing dietary habits in Aisa, would increase demand from those regions.
“This all looks likely to more than compensate for any falls in liquid milk consumption, and as these Asian and African patterns ‘bed down’ and become more established, we see the potential that is moving markets and prices up,” Quain observed.
At the start of quarter one (QI) 2020, the increases in butter, powders and cheeses in the last quarter of 2019 will most likely continue, and the first Dutch and European dairy quotations for 2020 are supporting that idea.
Concluding, Quain said: “We think that we’re looking at a series of prices rises that bridge the lag that unfortunately was allowed develop here between the Ornua index and farmer price, and may well carry into quarter two and increased production periods.