The evidence from the global milk market is that milk prices for August should be “at least” held, according to the Irish Creamery and Milk Suppliers’ Association (ICMSA).
Gerald Quain, the association’s dairy chairperson, argued that the declining global milk supply, as well the most recent Dutch dairy quotes for the week ended August 28, would justify the prices here remaining steady.
Quain called on co-ops to “cease their current policy of talking down milk price”.
The market fundamentals remain stable. I’m asking the co-ops to make a distinction between general economic and political pessimism and the actual data around milk price – and very specifically the data around supply and demand, both now and going forward.
According to Quain, the Dutch quotes showed that “cooler analysis and logic were beginning to reassert themselves against the negative news coming on the Brexit question”.
“Every single product except whey was up marginally on the quotes from the week before,” he said, referring to the quotes from the Netherlands.
“For example, whole milk powder is returning over 31.5c/L based on the Dutch quotations and the Irish milk price is now at the bottom of the EU league, and not far ahead of the Fonterra milk price, which has to be of huge concern to Irish farmers,” Quain stressed.
The average EU price for milk in July 2019 is estimated at 33.43c/kg, based on 4.2% fat and 3.4% protein, with the three major Irish processors in the league averaging 29.8c/kg – which represents a huge gap and cost on Irish farmers.
He urged that the next round of milk prices by Irish co-ops “has to reflect what’s happening in the markets”, adding: “We cannot have co-ops pointing in the vague direction of Brexit and citing that as a reason to ignore the facts that we all can see.”
Quain concluded: “We are well behind the EU average milk price and farmers expect that co-ops will at the very minimum hold milk price at current levels.”