‘Vital’ farmers stay positive for the future, says dairy industry leader

FARMERS and the wider rural community have been urged by a dairy industry leader to stay positive for the future.

It is vital that they do so, Lakeland Dairies chief executive Michael G Hanley declared in a Christmas message to suppliers.

He said the continued weakness of sterling and the dollar against the euro has made Irish dairy products significantly less attractive outside the eurozone.

But, during 2010, it is to be hoped the euro currency will weaken, allowing Ireland to regain some of its lost competitiveness and to improve its export potential.

Mr Hanley said this year global over-supply and reduced demand resulted in dairy market returns falling to their lowest levels in 30 years.

However, he predicted greater stability from 2010 onwards. Improving global demand will assist export-led countries like Ireland and it will benefit milk suppliers to Lakeland Dairies.

He said 2009 also saw the EU forced to reintroduce market supports, including export refunds and intervention storage.

“We believe these measures must be continued into 2010 and beyond so as to provide a safety net floor price from which the Irish dairy sector can achieve as rapid a recovery as possible,” he said.

Mr Hanley said world butter and milk powder prices have increased, spurred on by rising demand in Asia, China and the Middle East. Prices have also been helped by concerns of declining milk output from the EU, the US, Australia and New Zealand.

“If the global recovery persists, prices may reasonably be expected to improve well above 2009 levels. Given the historically low price levels that have been reached and the slow anticipated pace of recovery, these improvements will be gradual,” he said.

Mr Hanley said significant milk price swings could still take place from peak to trough in the years ahead.

He said many issues will still have to be handled sensibly and sensitively. There are significant stocks of dairy products in intervention stores.

“The European Commission will want to re-sell these 83,000 tonnes of butter and 283,000 tonnes of skim milk powder back onto the markets.

“These stocks will have a negative market influence as we enter 2010 and they must be carefully managed,” he said.