Not quite a re­turn to record milk prices, but...

Irish Examiner - Farming - - FRONT PAGE - Stephen Cado­gan

Milk buy­ers across Europe have com­mit­ted to fur­ther price in­creases for August and September. “Al­though the 2013 and 2014 record years are likely to re­main out of reach, 2017 will be a good milk price year,” said the Dutch LTO farmer or­gan­i­sa­tion, which mon­i­tors prices paid to farm­ers by 15 of the main EU milk buy­ers. LTO said the € 8.80 per 100 kg milk price rise from July, 2016, to July, 2017 ( a 33.3% rise) again con­firms the volatil­ity of milk prices.

One French milk buyer, the So­di­aal co- op, in­creased its milk price by €2.90 per 100 kg in July, but French prices are set to in­crease fur­ther, with Lac­talis an­nounc­ing €1/100kg ex­tra for both August and September.

DMK in Ger­many will pay €1 ex­tra for August, and Arla and Fries­landCamp­ina have an­nounced price in­creases for August and September to­talling €2.

Pres­sure con­tin­ues on the price of skimmed milk pow­der, still at an in­ter­ven­tion price level, while Dutch prices for but­ter and whole milk pow­der have reached an un­prece­dented high level. As a re­sult of this and the un­favourable euro-dol­lar ex­change rate, Europe plays no sig­nif­i­cant role on the world mar­ket now, ac­cord­ing to LTO.

The in­crease of al­most 2% in June was the first sig­nif­i­cant growth for a long time in the EU milk sup­ply. But it is mainly Ire­land and Poland tak­ing ad­van­tage of strong mar­kets, with sup­ply in­creas­ing strongly, while still fall­ing in ma­jor dairy coun­tries such as Ger­many, France and the Nether­lands.

Milk sup­ply in­creased sharply in New Zealand’s low pro­duc­tion month of June. How­ever, slow­ing ex­pan­sion is in­di­cated by this year’s re­duc­tion in dairy con­ver­sions in Can­ter­bury, one of the ar­eas of largest growth over the last 10 years. A wet spring has also af­fected early sea­son milk vol­umes.

In South Amer­ica, a long pe­riod of shrink­ing milk pro­duc­tion has ended, with a strong re­cent re­cov­ery in Ar­gentina and Uruguay, and US milk pro­duc­tion con­tin­ues to grow, hav­ing av­er­aged 2% growth for some time.

IFA Na­tional Dairy Com­mit­tee Chair­man Sean O’Leary said this week that Euro­pean dairy mar­ket re­turns for August rose to a gross 41c/l milk price equiv­a­lent, be­fore pro­cess­ing costs. He called on co-ops to pay at least 1c/ l ex­tra for August milk.

ICMSA Dairy Com­mit­tee chair­man Ger­ald Quain called for a sub­stan­tial August milk price rise. He said Ire­land is in 12th place in the EU for milk price, de­spite Ir­ish prod­uct be­ing of the high­est pos­si­ble qual­ity, and Ker­ry­gold but­ter be­ing a global brand leader.

ICMSA’s Ger­ald Quain: Ire­land 12th in the EU for milk price.

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