Positive GDT auctions give co-ops cause for confidence

IFA National Dairy Chairman Tom Phelan said that co-op boards, meeting this week to set the January milk price, could, despite more challenging times for dairy markets, take comfort from three consecutive positive GDT auctions, and from the stability shown by the Ornua January PPI.

He said this would allow co-op boards to hold the January milk price and give Irish dairy farmers a strong supportive message as the calving season begins in earnest.

“While dairy returns have come back in recent months, the seasonality of Irish milk production means co-ops can comfortably hold milk prices, and they must do so for as long as possible into spring to support their suppliers,” Mr Phelan said.

“The first three GDT auctions of 2018 have resulted in an 18 per cent butter price increase, a 17 per cent lift in WMP prices, and 15 per cent for SMP.

“Ornua has maintained their PPI at 111.3 points for January - stable from December,” he said.

Given the positive indicators so far in recent weeks, co-ops should have a great deal of confidence on prices into 2018.

“While dairy prices remain lower than at the height of 2017, the signals are less negative than even a few weeks ago. This must give co-ops the confidence to keep holding milk prices for January, and later into spring,” Mr Phelan said.