IFA: 8.4% fall in global dairy auction price an overreaction by operators
The IFA said the prices reached in the auction platform for internationally traded commodity dairy products were unsustainable, even for New Zealand farmers.
Dairy committee chairman Sean O’Leary said the GlobalDairyTrade was now operating independently from the market evolution on US and European markets, where prices were holding up at significantly higher levels.
“Closer to home, on the European market, where the bulk of Irish dairy products are exported, prices have eased from their January highs,” he said.
“But at the end of July, they remained at levels which would return 41 to 42c/l gross (before processing costs) for a representative Irish product mix — and this would justify current price levels of around 36c/l + Vat (37.8c/l including Vat).”
Mr O’Leary said he is clear the GlobalDairyTrade auction mechanisms will always overshoot realistic levels on the way up and on the way down.
“Right now, our markets are mostly within Europe, and those have returned enough in recent weeks for milk prices to hold for the month of July,” he said.
