Milk prices will fall over the coming months but there is no way of currently predicting when and where they will bottom out, according to the Minister for Agriculture Simon Coveney.
Speaking on his arrival at today’s ICMSA Annual Meeting, he said that milk prices have already fallen from 40c/L to 30c/L over the past number of months.
“I cannot predict how international market conditions will react over the coming months. The reality is that volatility will be a factor that farmers and dairy processors must face up to during the period ahead.
“But farmers knew all of this was coming. And we must now plan accordingly. We must put business plans to cope with this. The reality is that we can expect price downturns on a regular basis within a five-year business cycle. But part of my job will be to ensure that support can and will be made available to the Irish dairy sector, when it is required.”
The Minister went on to point out that dairy processors must strive to continually add value to the products they are manufacturing, which would help milk prices. The future for the Irish milk sector will be centred on the development of high value-added products, including butters, cheeses, infant milk powders and new sports nutrition drinks, he said.
“The recent progress made by Irish dairy processors on the Chinese market is an excellent case in point. Infant milk formula made in this country is already securing a healthy premium in China. And, obviously, we want more of this. Premium market returns will translate into stronger farmgate returns.”
Commenting on the actions that farmers can take in securing their own future, Coveney suggested that producers should seek to lock a significant proportion of their milk output into long-term, fixed-price contracts.
“There is also merit in the EU establishing a Futures Market for dairy products.”
Commenting on the steps which Europe can take to bolster milk prices over the coming months, the Minister said that he would seek to secure an increase in the EU intervention price.