Strong demand set to help milk prices
Favourable market prospects were confirmed at last week’s Fonterra’s online auction, where prices rose 10.6% for anhydrous milk fat, 20.6% for butter milk powder, 10.9% for skim milk powder, and 3.8% for whole milk powder. This left prices just 3.5% below their April 2010 high.
In the EU, declining milk powder and butter prices until the second half of November, and US dollar strength, made EU exports more competitive, and domestic and international buyer interest have led to a rapid price recovery.
Provisional figures indicate milk output in the EU-27 from January to September has increased by 0.8% more compared to 2009, and by 1.8% from April to September. This upward trend continued recently, with production reaching levels in some member states not seen in the last three years. However, recent bad weather is expected to hamper the increase.
Meanwhile, in New Zealand, production in the first two weeks of December was down 4.7% on the north island and 1.8% on the south island, compared to 2009, due to recent drought.
Milk production in the US was up 3.1% in November, compared to 2009. But much higher feed costs are pressuring producers.
Higher input costs are also worrying Irish farmers.
ICMSA dairy committee chairman Pat McCormack said last week that a strong milk price will be required in 2011 to compensate for higher input costs.
He said there is no excuse for co-ops yet to pay an end-of-year bonus to hold onto their additional profits made in 2010.
* A seasonality bonus took Glanbia’s November milk price from a back marker to third highest of the 17 milk buyers ranked by the Dutch Dairy Board, behind Friesland Campina of the Netherlands and Granarolo of Italy. The average calculated milk price of the 17 for November deliveries was €33.23 per 100 kg of standard milk. Glanbia paid €35.29, including the €5.34, Kerry’s milk price remained unchanged for the seventh month in row, at €29.84, the second lowest of the 17.
