Yesterday’s GDT (Global Dairy Trade) auction has again demonstrated the continuing strength of butterfat prices, with the butter price up 3.8% and AMF (Anhydrous Milk Fat) up 3.6%, according to the IFA’s (Irish Farmers’ Association’s) National Dairy Committee Chairman, Sean O’Leary.
Taken together with continued strong European market return trends, it is clear that a price increase on August milk of at least 1c/L is fully justified, the chairman stated.
O’Leary said that IFA National Dairy Committee members are getting in touch with their co-ops’ board members this week to discuss the reasons why such an increase is not only fully justified by the market trends, but also still badly needed to help farmers’ financial situation to recover after three years of poor prices and cash flow challenges.
“35% to 40% of the national milk output is produced between August and December annually,” the chairman noted.
“With significant increases in output, and good production conditions well into the summer, this proportion may even be higher this year.
The point is that every cent passed back to farmers will make a significant difference to their overall financial position, after three years of low prices and challenging cash flow.
“European returns for the end of August rose with the butter and WMP (whole milk powder) prices to a gross 41c/L equivalent, before processing costs.
“A price increase of at least 1c/L must be passed back to dairy farmers for their August supplies,” O’Leary concluded.
GDT returns to positive figures
The GDT auction yesterday saw the overall price index return to positive figures, after two consecutive decreases.
The price index reported an increase of 0.3% at yesterday’s GDT event. This follows on from decreases of 0.4% and 1.6% at the two most recent auctions.
The last time an increase was reported was on July 18, when the price index rose by just 0.2%. Prior to that, two consecutive decreases of 0.4% on July 4 and 0.8% on June 20 were recorded.
At yesterday’s event there was decreases reported across the indices for butter milk powder (BMP), skimmed milk powder (SMP) and whole milk powder (WMP). Alongside butter’s price jump of 3.8%, the price index for cheddar rose by 2.5%.