Challenges in future milk price volatility

Over the last number of years wholesale SMP prices in the EU have varied considerably from a monthly peak of over €4,000 in 2013 to a low of less than €1,500 in 2009 — an increase from the low point of around 175%.

This dramatic price variation, when combined with fairly similar variation in prices for other dairy products, has resulted in annual farmgate milk prices in Ireland varying from a low of just over 23 cent per litre milk in 2009 to a peak of over 39 cent per litre in 2013, with dairy farm income levels varying from a low of about €25,000 in 2009 to a peak of between €60,000 and €70,000 in 2011 and 2013.

This variation in incomes takes account of the income stabilisation given by the EU single payment and would be even more dramatic if that payment is excluded (see info graphic, below).