ICMSA president cautions against over-optimism on milk prices

THE president of the Irish Creamery Milk Suppliers Association Jackie Cahill cautioned yesterday against over-optimism over this year’s milk price.

He repeated his conviction that it is now abundantly clear European Union policy on the milk sector has failed.

Mr Cahill criticised the inability or unwillingness of policymakers to accept that production levels and farm price were linked.

He said this policy would condemn farmers to another year where production will be in excess of demand and where prices will be substantially below what is required to earn any income.

Mr Cahill said recent figures show that total milk production in the EU in 2009 was on a par with 2008.

Decreases in member states such as Ireland and France were offset by increases in Germany, Denmark, Belgium and the Netherlands despite an unprecedented and desperate fall in producer prices.

Mr Cahill said overall the ICMSA expectation is that EU output in 2010 will remain the same as 2009.

While global prices may increase, New Zealand is likely to record an increase in production despite recent worries of drought in that country and that will partially offset the projected decline in US production.

Mr Cahill said the prospects for EU milk price in 2010 are, unfortunately, not encouraging. It is almost a certainty the average price will not reach the level of 28 cent per litre or higher which is the basic minimum required to avoid further losses in dairy farming in Ireland.

Already there are indications of milk prices of 26.5 cent per litre being offered in Northern France for March milk.

The imbalance in the EU market combined with the reluctance of the Commission to fund the export of product out of the Community, and an overhang of supply from last year, is the major obstacle to that upward price movement dairy farmers so badly need, he said.

ICMSA and its European colleagues within the European Milk Board remain convinced a flexible supply-management system, enforceable under EU law, is essential to lift milk price permanently above 30 cent per litre.