IFA Dairy Committee Chairman Seamus Brennan has said that EU and global dairy markets continue to be very buoyant, justifying further milk price increases in the next
few months.

According to Mr Brennan, based on current market trends and spot returns, producer prices of up to 30c/l + VAT are realistically achievable over the next couple of months. “Early this year, we had targeted 28c/l as the minimum which would be needed to allow farmers cover their costs and pay themselves a very modest wage.  At the time, the market was relatively weak after a level of recovery at the back end of 2009.”

The IFA man added that since then, tight supplies and strengthening demand have meant that product prices have lifted much more rapidly, and to a far greater extent, than anyone expected, making it possible to better and more fairly remunerate farmers for their milk in 2010. “In the last week, EU butter spot quotes have risen to levels of €3,800/t, or 70% above intervention, while global butterfat prices are also on the up. Cheddar cheese prices on the UK markets, which always lag the butter/powder price, have also lifted very significantly in the last few weeks.”

Mr Brennan also said that based on spot prices, current gross commodity returns before processing costs, on EU markets. Almost all reach 34 to 35c/l, with some like cheddar cheese and whey powder and Dutch butter/powder, exceeding that figure. “Spot prices are always indicative of the trend for real prices achieved by operators on the market place.  It is therefore realistic to expect that prices of up to 30c/l + VAT can be paid to Irish farmers in the next month or two.  In view of the huge financial losses dairy farmers have suffered in the last two years, it behoves all co-op boards to see to it that the maximum possible return is paid back to producers,” Mr Brennan concluded.