Irish milk prices surge to top level
Their rankings of May milk prices paid by 17 major processors showed Glanbia paying the fourth best price and Kerry paying the sixth best price.
The two Irish processors were ranked last and second last for milk price in the Dutch Dairy Board’s annual report for 2009, which includes all supplementary annual payments (although Kerry and Glanbia PLC dividends were not included, because they are unrelated to milk volume).
Since 2000, the Dutch Federation of Agriculture and Horticulture (LTO) has commissioned the Dutch Dairy Board to compare the milk prices of leading EU companies. Their 2008 report showed the highest prices ever, followed by the lowest in 2009. And the volatility remains, with milk prices rapidly recovering in spring.
The influence of the volatile world market has increased rapidly, Brussels is less involved, and farmers and processors must react faster, and need innovation, market knowledge, and strong market positions based on sustainability, according to LTO.
The price figures compiled for them by the Dutch Dairy Board are standardised for milk of 4.2% fat, 3.4% protein, VAT-excluded for a 500,000kg per year delivery, of TBC 24,999 and SCC 249,999, collected every other day. The 2009 average was €29.62 per 100kg; Kerry was ranked 16th with €22.71, Glanbia 17th with €22.67.
The 2008 average was €34.58 per 100kg; Kerry was ranked 12th with €33.03, Glanbia 11th with €33.54.
But figures for May, 2010 put Glanbia at €30.03, and Kerry at €29.84, versus an EU average of €28.61. Their milk prices fell the most in 2009, attributed to the Irish industry’s greater dependence on a limited home market and on exports out of the EU, leaving Ireland most exposed to the world slump.
The effect on Irish milk prices was magnified even more, because so much of Ireland’s production goes into the basic butter and skim milk powder commodities, and the decline of sterling against the euro turned the screw even harder, making exporting to Britain harder, and opening the way for increased imports of cheaper liquid milk from the North.
But EU milk prices started to lift last August, due to falling production, improving consumer spending, and intervention buying.
All EU dairy produce found a market in April, due to strong demand and limited supply, and improved EU exports – as the Oceania production season had ended, and the euro had weakened versus the dollar.
By May, EU milk prices had reached levels surpassed only in 2001 and 2008. But the May market has been calmer, with the sharp price rises for butter and skim milk powder ending, and EU intervention sales leaving buyers cautious.
