Irish milk production jumps as prices fall
Sources at Glanbia Ingredients Ireland have revealed that the weekly milk supply to the company is currently running 18% ahead of the previous year.
Meanwhile, yesterday’s Global Dairy Trade auction, which reflects the world price for dairy product, fell 5.9% from the previous bi-weekly price level.
The price for some products fell 10.8%, and it is the eighth auction in a row of falling prices.
At yesterday’s Teagasc open day on dairying at Moorepark, IFA President Eddie Downey called on Agriculture Minister Simon Coveney to ensure that the EU Commission reviews dairy intervention prices.
IFA national dairy committee chairman Sean O’Leary said current intervention prices equivalent to a 22c milk price cannot credibly be described as a safety net.
“Production costs have increased strongly since 2008, the last adjustment of the intervention price.”
“The pressure on milk prices has been intensifying in recent weeks, and they have been falling well below the €30/kg break-even threshold,” said Mr Downey. The IFA leader has also asked EU Agriculture Commissioner Phil Hogan to immediately review dairy intervention prices.
ICMSA President, John Comer, wants the dairy intervention price set at 28c per litre. Irish dairy farmers also join with colleagues across the EU in calling on the EU Commissioner to retain within the dairy budget the estimated €700m 2014/15 superlevy fine for over-production.
Meanwhile, Ireland’s main milk processor, Glanbia Ingredients Ireland, collecting milk from 21 counties, has projected it will process over 1.8 billion litres this year, as its weekly milk supply runs 18% ahead of the previous year.
However, sources at the company believe they are better prepared than most for milk price volatility, with 30% of suppliers having 40% of milk in a fixed milk price scheme.
And the Glanbia Co-op has moved to a 10% milk price subsidy, after GII reduced the base manufacturing milk price for May by 1c/l, to 27.5c (including VAT), reflecting ongoing weakness in global dairy markets.
Glanbia Co-op pays members who have signed a Milk Supply Agreement a bonus of 3c (including VAT) for May manufacturing and liquid milk, thus holding the manufacturing milk price for May supplies at 30.5c.
Strong milk constituents are also helping Glanbia suppliers weather dairy market difficulties; their May butterfat averaged 3.828%, and protein was 3.481%.
Many Irish farmers are getting only 28c per kg for milk, but the most intense pressure on the EU to help dairy farmers cope with the industry’s third crisis of low milk prices within eight years is likely to come from continental dairy farmers, who have higher production costs.
Figures just published show the average Dutch dairy farmer lost money in 2014 — a year of relatively high prices.
Many are currently paid 25-28c/kg prices in the Netherlands, 25-26c in Belgium, 29-30c in France, 29c in Denmark, and 26-30c from Germany.
In the UK, some farmers supplying the First Milk co-op, the UK’s largest dairy company, expect to get only 20c per litre for July milk.
