EU ‘cannot hamper dairy expansion’ – IFA

Critical issues are down for decision at a major debate on the future of dairy farming, IFA President John Bryan said this morning.  This debate is organised by the Europe Commission in Brussels next month and Bryan said the outcome cannot derail the opportunities for Irish dairy farmers to expand when quotas are abolished after 2015.

Speaking at the Virginia Show in Cavan today, Bryan said: “The Irish Government must look to other Member States for support for our position, and build alliances against the proposals to restrict output put forward by the French rapporteur in the European Parliament, Michel Dantin.

“Farmers have a positive outlook and a strong commitment to develop their farm, but plan to do this prudently.  Among the challenges ahead are the volatility of milk prices and input costs.  On the volatility issue, solutions will have to be developed to help farmers manage a more variable income, which may include tax-related options and an increased prevalence of fixed price contracts from milk purchasers among others.  It is of course essential that banks recognise the reality of volatile farmers’ incomes, and step in to provide better financing solutions for cashflow as well as investment.”

IFA National Dairy Committee Chairman Kevin Kiersey said current market realities mean a milk price of 38 cpl + Vat is justified, and he called for continued firm commodity prices to underpin the sustainability of Irish producer prices.  He urged co-ops to boost their suppliers’ confidence, and their ability to repay the massive feed bills they still owe the co-ops’ own merchant services, by announcing that they will maintain their milk price at 38c/l until next spring.

“With global markets still influenced by constrained supplies, and despite rising US production, all eyes are on the New Zealand early season to assess how the supply/demand balance might evolve in the second half. Up until now, the assumption had been that milk output would take off in the Southern Hemisphere, on the back of higher producer margins linked to stronger milk prices and lower feed costs – and this sentiment led to weaker world prices from late spring,” he said.

“The current outlook for global dairy markets for the rest of 2013 augurs very well for the sustainability of producer milk prices of around 38c/l for several months at least.  I urge co-ops to signal this to their suppliers to boost their confidence and help them deal with outstanding input bills,” he concluded.