ICOS urges EU to create dairy futures market

Europe needs to develop a functioning dairy futures market, to allow farmers, or co-ops on their behalf, to hedge their position in the market, said ICOS president Martin Keane.

Following yesterday’s national Dairy Forum in Dublin, ICOS highlighted market volatility as the key ongoing challenge facing dairy co-ops and farmers, and urged all parties to commit to developing structures to mitigate its worst effects.

“We are now in the fourth significant market downturn since the EU reduced support levels in the mid-2000s, and we still have a lot to do in terms of helping farmers to cope with damaging market fluctuations,” said Mr Keane.

“Recently, we have seen some tentative signs of recovery in prices. However, 2016 could be another challenging year.

"The current process of balancing supply and demand is one of attrition. Low prices cause difficulties at farmer level, reducing production. High prices cause difficulty at consumer level, and reduce demand.”

ICOS dairy committee chairman, Jerry Long, also attended the forum, an industry-wide meeting of co-ops, merchants, Teagasc, the banks and the Government.

The ICOS executives said the dairy sector would need more focused EU support tools and a functioning European dairy futures market in advance of the next downturn.

They also propose greater availability and uptake of fixed price schemes, and a national income deferral scheme.

“The experience this year, whereby €500m has been allocated to support measures in the dairy and pig sectors, while welcome, demonstrates Europe’s unwillingness to intervene in markets,” said Mr Long.


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