IFA calls for pre-spring holding of milk prices

The focus of the dairy industry should be on holding milk prices to sustain farmer confidence ahead of a challenging spring, according to the Irish Farmers Association.

Dairy Committee chairman Sean O’Leary warned the industry and media commentators that their pessimistic views on the likely 2016 milk prices could have a damaging impact on farmers’ confidence.

He said experience has shown that these views were as likely to be wrong as right.

Teagasc was predicting 12 months ago that the average price for 2015 would be 27c/l, which was wide of the actual 30c/l mark.

Ornua and some co-op commentators were predicting spring 2015 base prices of 24 to 26c/1.

Yet, dairy markets rallied in February and March last year, allowing for stronger base milk prices of just over 30c/l.

“Expert analysts differ as to when market recovery will lift milk prices next year.

"If that is before peak or during peak, it will impact average Irish milk prices more positively than after peak.

"The truth is, while many will take an educated guess, no-one actually knows,” he said.

Mr O’Leary said the rebalancing of markets is clearly underway.

“Well established market analysts Rabobank, in their fourth Dairy Quarterly Report published last week, indicate that supply and demand are already coming back into balance.

"All these elements suggest that output is easing, with regional differences, especially for the EU, and demand is picking up.

"While it will take time for this to translate into a milk price uplift, it should allow co-ops to hold milk prices for the next few months to help maintain farmer confidence in anticipation of the forthcoming market recovery,” he said.


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