Butter surge lifted all boats but are there some choppy waters ahead?

AS the farming year rolls to it’s annual conclusion I find myself looking back and also looking ahead to shape our plan for 2018 and future years.

We received an excellent overall milk price for the year which was very welcome.

The price rise has been driven by a very strong and unexpected increase in butter prices globally.

The internationally recognised Kerrygold brand delivered in spades for Irish milk producers this year and confirms the value of strong brand names that deliver returns back to us not the retailer.

Butter prices peaked at extremely high levels but have now settled back at around €4,500 a tonne. This is a solid level and would create a sound base for the dairy farmer/industry going forward.

The price reflects the renewed appreciation consumers have for butter after the prolonged popularity of synthetic margarines.

Germany, of course, is the most rewarding market for Kerrygold premium priced butter sales, but the UK takes a quarter of our butter exports along with two thirds of our cheese exports.

The UK is our biggest, best and nearest market and it is absolutely critical we retain the current level of tariff and border-free access.

With the growth that is coming in milk output there will be a major challenge to find new premium markets and we can definitely do without losing any ground in the very important existing one right on our doorstep.

One interesting change that has shown up in our milk payment statements is the way fat and protein are paid for.

Over the last few years we have become accustomed to being paid at least twice as much per kg for protein as against fat.

In my October Aurivo statement there was near parity at €5.90/kg of protein and €5.30/kg of fat.

The value of powder will have a massive bearing on future milk price and we need prices to rise to ensure that EU Intervention is not the best buyer.

This year Aurivo came out with a very strong fixed milk price offer of 33.5c/l. When combined with their “Flexi Milk Loan” scheme, this gives a very stable foundation on income security.

Aurivo are to be compli-