New models for ‘milk pricing and managing market volatility needed’

Ireland’s dairy sector may have to look at new models for milk pricing and for managing global market volatility, say milk industry experts.

Irish and visiting speakers at yesterday’s ‘Managing Price Volatility in the Irish Dairy Sector’ conference in Cork Institute of Technology agreed that farmers were sporadically being placed under severe income pressure by the dislocation between the long dairy farm production cycle — sometimes up to 18 months — and the eventual cash return from dairy products.

In this context, Agriculture Minister Simon Coveney said the days of relying on CAP and other European interventionist market measures was a thing of the past. Farmers, he said, are likely to be required to become more and more independently funded in the years ahead. In terms of managing volatility, this will mean that dairy farmers who want milk price stability will have to sign up to price hedging mechanisms offered by private sector financial institutions.