‘Op­ti­mistic’ fore­cast on global dairy trends

Irish Independent - Farming - - NEWS -

THE BOSS of LacPa­trick Dairies re­mains op­ti­mistic on the prospects for milk prices this year, say­ing he doesn’t ex­pect a re­peat of the col­lapse in prices seen two years ago,

Gabriel D’Arcy, who over­sees the cross­bor­der milk pool, said there were “en­cour­ag­ing signs” on the mar­ket side with the global econ­omy.

“The re­cov­ery in oil prices is a big fac­tor as well, it will take a lit­tle while to feed through. In the past there’s been a cor­re­la­tion be­tween oil prices and dairy prices,” he said. “There might be a lit­tle bit of im­bal­ance at the start of the year that might moder­ate prices, but I sus­pect as the year pro­gresses that will iron out. I’d be op­ti­mistic.”

LacPa­trick cur­rently han­dles more than 600 mil­lion litres of milk with more than 500 sup­pli­ers in the North and the re­main­der of its 1,000-plus farm­ers in the Repub­lic, around the bor­der re­gion.

He said last year was good in terms of milk prices. “On av­er­age, farm­ers came away with 27 or 28 pence per litre, early 30 cents per litre. Cer­tainly if you were to look at where prod­uct re­turns are to­day, you’d be lucky to get 25 pence per litre.

“Do I think we are head­ing into a col­lapse like what hap­pened two years ago? No.”

He said over the past few months there has been too much milk pro­duced, which far ex­ceeded what was ex­pected. Mr D’Arcy pointed out this has had a “mod­er­at­ing ef­fect” on the main com­mod­ity, but­ter and cheese. “Pric­ing is go­ing to be dif­fi­cult. The over­all milk out­put across the main milk pro­duc­ing re­gions has re­cov­ered very strongly, much more strongly than most com­men­ta­tors would have ex­pected.

“Glob­ally, the milk out­put is prob­a­bly in­creas­ing year on year about 1.5pc. In Europe, it’s higher and look­ing like the first half of the year could be ex­cep­tion­ally strong, par­tic­u­larly in Ger­many and France and Bri­tain.”

There were strong price in­creases of al­most 6pc re­ported in the last Global Dairy Trade auc­tion. EU dairy prices re­main sta­ble, with but­ter prices slightly up and SMP at 140 €/100 kg for the fourth week.

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