Board signals milk price gain

Positive dairy market signals continue, with the Irish Dairy Board raising its Purchase Price Index from 93 to 97.5 for February.

The index tracks market returns for Irish dairy products.

Meanwhile, the EU, which is the world’s top producer, has confirmed slowing milk production, in a report which is relatively upbeat on the milk price outlook.

Milk deliveries to EU processors will rise by 1.2% to 149.4m tonnes in 2015, according to the European Commission — a slowdown from last year’s 4.5% increase, despite the lifting of quotas in 18 days time.

The commission highlighted the milk production cutback in Ireland, attributed to the big superlevy hanging over farmers.

EU cow slaughter has risen, dramatically in some countries, with Polish culling 50% higher in the September-to-December period than a year before.

The commission forecasts the EU dairy herd declining to 23.1m head this year, from 23.3m head in 2014.

Milk yields, which increased last year by 4% to a 6,744 kilogrammes per head average, are expected to continue to rise, reaching 6,876 kg per head in 2015 (6,656 litres or 1,462 gallons).

The EU report also forecasts further dairy herd shrinkage in 2016, to 23m head, but average milk yield rising to 6,968 kg per head (6,745 litres).

That would leave milk deliveries rising by only 700,000 tonnes, to 150.1m tonnes, the slowest rise since 2012.

Based on the latest market returns and milk prices quoted from European milk processors, there is growing evidence to suggest that the dairy markets continue to rebound with confidence, according to Mr Pat McCormack, Deputy President and Chairperson of ICMSA’s Dairy Committee.

He pointed to Friesland Campina, the Dutch dairy co-op, increasing their milk price for the second month running.