Gerald Quain, dairy chairman of the Irish Creamery Milk Suppliers’ Association (ICMSA) has warned that the group will be “extremely angry” if processors don’t hold dairy prices for the first quarter of the year.
Quain argued that, because of the strong start to the year, continuing on from December’s trend, there would be no justification not to hold prices and added that, in fact, a price rise is what’s called for.
He called on processors to review the market after the first quarter of the year and then take the appropriate action, though he believes that there is only one obvious course:
We’d be confident that by then it will be obvious that a price rise is justified but, in the meantime, we cannot see why a processor would even consider not holding price and we’d be extremely angry if they weren’t willing to wait the few weeks till the market data confirms absolutely what’s already obvious – markets are moving upwards and prices will follow.
The ICMSA had already heavily criticised the processors that cut November prices, despite what the association called a “raft of positive market developments” and a strong purchase price index (PPI).
According to Quain, a number of factors should make processors a “little more anxious” to secure a supply, which, he argued, should have a positive effect on dairy farmers’ pockets.
These factors include the slowing down of EU milk production – 2019 production will increase by less than 1% – and the fodder supply issues in several countries.
On top of that, the most recent Global Dairy Trade (GDT) auction saw a 2.8% price rise, with all products faring better – particularly skimmed milk powder, with a rise of 7.9%, and butter, with an increase of 3.9%.
All these factors combined, said Quain, should be fed back to farmers after the first quarter of 2019 by processors raising prices.