Milk prices set to improve, says Teagasc

MILK prices and dairy farm margins should begin to recover in 2010, but it may yet be 2011 before the sector returns to a normal level of profitability, Teagasc has predicted.

In the Teagasc outlook report, Trevor Donnellan and Paul Smyth have said an annual average milk price of 26 cent per litre may be achieved in Ireland in 2010, with the possibility of a higher average price for the year if dairy markets are in good shape through the peak milk production months. “Indications are that much of the world is emerging from the recessionary period and this may boost dairy product demand internationally. The growth in global dairy supplies has slackened off following the period of low dairy prices.

“The existence of relatively high levels of dairy stocks, and uncertainty about the timing of their disposal, complicates the forecast of milk prices and dairy farm margins in 2010.