Reacting to a prediction of poor year-end farm-gate milk price of less that 30cpl by the Irish Dairy Board (IDB), IFA President Eddie Downey said the IDB’s role was not to predict milk prices, but to optimise the value of Irish dairy products on international markets.
“We are experiencing temporarily weaker and unstable markets in the dairy sector at the moment, exacerbated by the Russian ban, and IFA are actively involved in Brussels on the matter. However, the long term outlook for growing global dairy demand remains positive. I am frankly very disappointed that the IDB, who are not buying any milk from farmers, are taking it upon themselves to talk down the price of milk. Farmers support the IDB to market their product and find premium outlets,” Downey said.
Released in recent days the Irish Dairy Board’s (IDB) Production Price Index (PPI) for August was down over 3% on the July return and is now at its lowest level since March 2013.
The Index is now trending for seven months downward with falls over that period totalling over 14%. This follows on from a fantastic 2013 for dairy returns, with the Index having only fallen once in 2013.July’s result is also some 14% behind the same month last year. The June result comes on the back of prices paid at last week’s Fonterra dairy auction being down by 6%, compared with those recorded at the event held late July.
The IDB released its monthly PPI today and it showed a return value of 114.8, which indicates a 14.8% increase in market returns when compared to 2010.
Downey said: “I also expect the IDB to lobby with us for greater levels of emergency EU market supports funded from outside the CAP, such as targeted export refunds, extended APS to match the 1-year duration of the Russian ban and higher safety net intervention prices matching increased production costs,” he said.
“Last week, IFA outlined their concerns at a meeting in Brussels with outgoing Commissioner Ciolos. I have sought an urgent meeting with incoming EU Agriculture Commissioner Phil Hogan to deal with these issues, which I will be asking the IDB, and other industry stakeholders, to support,” he said.
Commenting on the fragility of farmer confidence, IFA National Dairy Committee Chairman Sean O’Leary, who represents IFA on the Irish Dairy Board, stated: “Sentiment is just as important on farms as it is on international dairy markets. While I have no difficulty with the IDB reflecting the actual market returns and signalling the likely outlook, it is unwise to step out of its role and predict milk prices falls. Undermining farmer confidence will damage on-farm investment and the future of the dairy industry”.
“The best way for the co-ops who do purchase the milk to promote long term confidence without which the industry’s expansion plans simply will not happen is for them to make and communicate judicious and careful milk price decisions over the next few months, so that farmers can see their milk prices end 2014 at reasonably firm levels,” he concluded.