Profitable 2014 predicted for top Irish milk producers

A profitable 2014 is predicted by Rabobank for milk producers around the world, at least for the first half of the year, and particularly for intensive feeding producers.

“2014 will be an intriguing period for the global dairy market,” said analyst Tim Hunt. “We expect prices to hold around current highs before easing from mid to late 2014 with continuing supply growth in response to significantly improved margins. Any subsequent reduction in pricing will be limited by structural constraints on suppliers, the need to replenish depleted inventories and ongoing demand growth in line with a slow economic recovery,”

Globally, farmgate milk prices are at record or near record highs in many regions. Many Irish co-ops expect their average price for the year to be the highest ever.

Meanwhile, the prices of feeds such as soybeans and maize have fallen 10% to 40% below prior year levels (in US dollar terms), opening up large margins for intensive milk production.

International dairy commodity prices strengthened from already high levels in the three months to mid-December, and are expected to remain high at least for the first half of 2014. The increased export supply since September has been largely soaked up by continuing vigorous buying from China. Rabobank believes that many buyers in regions including South East Asia, the Middle East and North Africa, have used back-up stocks and are struggling to secure enough supply, forcing prices to edge up even further recently.

* In other dairy news, a new Glanbia plant in Co Monaghan is expected to be operational by early 2014, employing up to 40 in manufacture of standard and fortified UHT milk and cream products, including export versions of Glanbia’s Avonmore Milk. It will produce long-life liquid milk and cream suitable for export to emerging markets, China, Europe and the Middle East.

The investment is supported by Enterprise Ireland and the Department of Agriculture and Food.

Glanbia has also announced 50 highly skilled jobs in Dublin at its new Global Performance Nutrition head office for Europe, the Middle East and Africa.

Agriculture Minister Simon Coveney said: “I am delighted to welcome the announcement of 90 jobs and associated investments by Glanbia.”