Irish hopes for milk price rise rising
Weather extremes down under in New Zealand and Australia are adding to the fodder shortages and high feed prices which are holding back EU production.
Globally, dairy commodity prices are on the way up, due to increasing demand coinciding with pressure on milk production, according to analysts at the specialist Rabobank agribusiness bank.
Although New Zealand milk production was up about 5% to date in this season, it has started to fall significantly in the North Island, due to dry weather.
As a result, Rabobank predicts NZ milk flows to start falling behind prior year levels from now onwards.
In Australia, milk production was down 1.3% in December. Argentine dairy output was down 7.7% in December.
Up to last November, French milk deliveries dropped by 3.7%, compared to the same period in 2011, but German production was up by 0.8%.
UK milk production is now running nearly 5% behind previous year levels.
Global commodity prices are already at their highest in 19 months, after a sharp recovery from a 2011/12 slump. But the first year-on-year production declines in New Zealand — the top exporting country — since 2010 is expected to inevitably push prices up, as soon as key import regions have worked through any accumulated inventories.
US farm officials forecast their milk output rising by 0.3% in 2013.
nIFA national dairy committee chairman Kevin Kiersey said the 1c/l January milk price increase recently announced by Glanbia was “the first step” to maximise milk prices as early as possible this year.
He said current market trends look set to hold for the next few months at least, and allow for milk prices of up to 34c/l plus VAT. He said, “There is no reason why co-ops cannot deliver significant milk price increases before peak production starts.”
According to IFA, high costs and low profitability are expected to constrain milk production in the northern hemisphere at least for the first half of the year.
