Dairy prices are unlikely to fall significantly
The Board says prices are unlikely to fall significantly while a shortfall in the supply of dairy products on the world market relative to potential demand continues.
In its monthly milk price comparison for 17 milk buyers across the EU, most dairy companies have lowered milk prices from January to February, but prices remained 33.9% ahead of February 2007.
The comparison standardises price at relatively high levels of milk solids, by Irish standards — 4.2% fat and 3.4% protein — for delivery of 500,000kg per year, TBC 24,999 and SCC 249,999, collected every other day.
The February price averaged €37.87 per 100 kg of milk. Once again Glanbia topped the rankings at €43.66. Kerry paid the fifth best price at €38.80.
Average prices in the rankings were given for New Zealand, at €28.35, and the US, €28.41.
Dairy farmers in New Zealand are getting their highest milk price in 10 years, but drought conditions have reduced their milk production, forecast to fall 4.5% year on year for the 12 months to June.
This forecast is 50% greater than a 3% fall in dairy production which IFA President Padraig Walshe had predicted would significantly tighten world market supplies.
According to the Dutch Dairy Board, the predicted 4.5% slump could cause big problems for New Zealand’s giant dairy co-op, Fonterra, if they cannot carry out their obligations for delivery.
US farmers are also getting their highest milk price in 10 years. But the international market for dairy commodities is dominated by the a lower US dollar rate and low American dairy product prices.
