Price boost for Irish producers as European milk supplies dip

MILK SUPPLIES across the EU were back 3.4pc for the last quarter of 2016 compared to 2015, according to figures released by the European Commission.

These production statistics are good news for Irish farmers, as European milk volumes this spring will dictate how prices develop across the year.

Industry commentators say markets remain stable, mainly as a result of tighter supplies on global markets, rather than increased demand for product.

With New Zealand entering the last quarter of its production cycle, milk output in Europe will dictate price trends for the coming six months.

The Commission figures confirm that milk deliveries across the EU-28 were back 1.24bn litres in the period from October to December, exceeding the volumes applied for under the EU Milk Reduction Scheme by almost 200m litres.

The data confirms the importance of the scheme in encouraging a massive contraction of milk deliveries at the end of last year.

The EU as a whole sought to reduce milk supplies by 2.9pc under the milk reduction scheme, but the fall-off in supply recorded was far greater than planned in Germany, France and the UK.

As the accompanying table shows, French production fell by 7pc or 426m litres, even though French dairy farmers applied for just 176m litres under the reduction scheme.

Similarly, German supplies were back 4.6pc or 347m litres, although the planned reduction was just 278m litres.

The UK applied for the third-largest reduction volume at 109m litres, with actual production dropping by more than double this amount.

Ireland’s 4.8pc production cut was less than the 6.8pc sought but still totalled 51m litres.

Phosphates

The actual change in milk deliveries over the period varied across EU member states, with some reducing production by more than the applied-for volumes, and others increasing total production.

The Netherlands, Italy and Poland all actually increased production in the last quarter of 2016 relative to 2015 supplies, with Dutch deliveries up 0.6pc, Italy up 2.5pc, and Polish supplies 1pc greater.

Meanwhile, the EU Com- mission has given the green light to the Netherlands’ interim phosphate reduction plan.

The plan aims to reduce phosphate emissions by 10.8mkg, by culling over 100,000 cows and cutting Dutch milk production by 6–10pc.

A €50m Government support package will compensate farmers to the tune of €1,200 for every cow culled.

The average phosphorous content in dairy rations must also be reduced as part of the plan.