Opinion: ‘The market not politicians will be the saviour of dairy farmers’

Dairy farmers should take some respite in the fact that sentiment and commentary around on the dairy market took a notable change for the better in recent weeks, with market soundings shifting from ‘weak demand’ and ‘high production’ to talk of ‘have we reached the bottom?’ and ‘China is back buying more’.

While such talk must be music to the ears of dairy farmers, as they well know you can’t lodge ‘talk’ in the bank and no one is suggesting that recovery in farmgate milk prices is anything but ‘around the corner’.

However, recovery has to start somewhere and there was good news on the European dairy market front, as EU dairy products’ prices generally increased last week, compared to the previous four weeks’ average.

Latest figures from the EU milk market observatory show a 4.7% increase for butter, 4.3% for WMP, 1.4% for SMP, while cheddar decreased by 1.3%.

Meanwhile, spot milk prices also improved further last week, in Italy 27.3 c/kg and in the Netherlands 26.5 c/kg.

And it’s to the market that dairy farmers are looking to for solace these days – far more than they are looking to their politicians for leadership or solutions.

Indeed, the only concrete outcome of the most recent Dairy Forum was a booklet on being ‘financially fit’. While there is probably room for improvement in most people’s finances, if that’s the best outcome dairy farmers can expect from the experts around the table at the Dairy Forum it will do little to appease them.

The ability of the Government and the EU to come up with effective measure to help farmers has been shown to be tame. And it’s not that both institutions have lacked the will or the ambition to improve the dairy market, but the scale of the problem is now far too big.

The Government or the EU just hasn’t the required financial firepower anymore to have a real impact and, even if it did, dairy farmers would be down a long line of people looking for help.

Talk of using the EU Crisis Reserve to fund this injection of help is not good. The Crisis Reserve pulls its funds from all farmers and if dairy farmers are successful in diverting part of this toward their current crisis, it’s only a matter of time before calls will be made for it to be made available to other farmers in other sectors.

The peaks and troughs that farmers are currently dealing with will continue to be part of their future and the sooner they learn to work through them, the better for their own sustainability and that of the industry.

The days of the ‘dig out’ from Europe are coming to a close.