United Dairy Farmers’ Group Chief Executive Dr David Dobbin is advising milk producers in Northern Ireland to ease back on output levels over the coming months.
“And, in saying this, I am not picking on producers in this part of the world,” he added.
“The reality is that there is too much milk coming onto international markets at the present time. We now live in a world of supply and demand. China has effectively stopped buying dairy products and Russia’s food import ban is having a very detrimental impact on EU markets.
“China might possibly start buying milk products in the early New Year. But there is absolutely no guarantee this will happen.”
Dr Dobbin went on to confirm that more milk was produced in Northern Ireland during October than was the case for the previous month.
“This is the first time that this has happened in living memory. In order to reverse the current downward trend in international milk prices, global milk output must come more into line with demand.
“US production is currently increasing on the back of cheap grain and producer access to cut price energy, both gas and electricity. This has led to high levels of skimmed milk powder coming onto international markets from the US.
“In our own case we are receiving realistic returns for liquid milk and our branded dairy ranges at the present time. But these are being used to augment the significant drop in return for those commodity products that are traded on international markets.”
He also said that next year will also see the end of EU milk quotas. “And there is every prospect that milk output will increase within the Republic of Ireland from the spring of 2015 onwards. This further heightens the need for China and Russia to actively engage on world dairy markets over the coming months.”