Glanbia and Cork co-ops under pressure to support milk prices
IFA National Dairy Committee chairman Kevin Kiersey has asked Glanbia, which cut its April milk price by 3c/l and its May milk price by a further 2.5c/l, to announce an end to milk price cuts for 2012.
He accused the country’s largest milk processor of inflicting a major financial blow to suppliers, which will make the kind of on-farm investment necessary for expected post-2015 expansion nigh on impossible.
He said members of the IFA national dairy committee are lobbying co-ops countrywide to hold their May milk prices.
ICMSA deputy president Pat McCormack made a special appeal to Co Cork dairy co-ops to maintain their record of paying the leading milk prices. He accused co-ops of being much faster to act when prices are falling, compared to when milk prices are is rising.
However, dairy market analysts at Rabobank have cautioned against expectations of a sustained recovery in dairy prices, despite the 13.5% price increase in last week’s Fonterra global DairyTrade auction. Analysts said the global market is taking time to digest the additional dairy production volumes from a period of bumper output, led by New Zealand’s 11.5% production rise for the first three months of 2012.
Southern hemisphere producers such as New Zealand have entered their lower-output winter months, and EU and US milk flows have reached or recently passed their seasonal peak, said Rabobank analysts.
But they pointed to inventories building in the northern hemisphere, including nearly 80,000 tonnes of butter offered to an EU-assisted storage programme — up nearly 30,000 tonnes year-on-year.
“It is likely to take a few months before markets balance,” they warned.
