Citing demand from Asia for milk powders, the Irish Creamery Milk Suppliers’ Association (ICMSA) has said today (Wednesday, February 3) that it is expects milk prices from processors to rise this month.
Speaking in advance of the announcement of the first round of 2021 milk prices by co-ops, the chairperson of the ICMSA’s Dairy Committee noted the current “impressive momentum” behind the milk markets.
Ger Quain argued that co-ops must return higher prices to the farmer suppliers in the coming months, starting with the upcoming January price setting.
The milk ‘spot’ market has seen very strong momentum in the first four weeks of 2021 and that’s backed up by positive farmgate increases from the southern hemisphere, where Fonterra have upped their predicted price range for the season.
“This momentum is really visible in the Global Dairy Trade [GDT] which has just recorded its sixth straight increase and is now at it highest point in almost seven years,” Quain added.
Quain was referring to the latest GDT auction results yesterday, which saw an increase of 1.8%.
The ICMSA dairy chair continued: “Demand from Asia for powders is a very significant factor and that can be seen in the 3c/L increase for the standard butter/SMP [skimmed milk powder] mix and 1.5c/L for WMP [whole milk powder] in Dutch quotations over the four weeks of January, which is a very substantial jump in a short period.
“January is a low production month in Ireland but farmers will absolutely expect a price rise proportionate to the market surge and they’ll expect that momentum to carry on into the coming months where production begins to climb,” Quain concluded.