No early milk price uplift

Irish farmers are unlikely to see any lift in milk prices over the next nine months at least, a major agri-food conference was told yesterday.

Kevin Bellamy, global analyst with Rabobank in the Netherlands, made the prediction at the Agricultural Science Association (ASA) conference in Kilkenny. 

He said a continuing sluggish global economy and a gradual slowing of growth in China indicate little prospect of a lift in prices until at least the second half of 2016.

“The strength of the dollar, while good for food exporters like Ireland, also makes things more expensive for developing countries leading to a slowdown in food demand growth,” he said.

Mr Bellamy said global dairy prices have dropped 60% over the past 12 months and are now back to the crisis levels of 2009. 

“Certainly, the weakening of the euro relative to the dollar and sterling has cushioned Irish dairy farmers against the worst effect of the slump in prices.

“While Irish milk prices have fallen, in dollar terms, Ireland is currently the lowest cost producer in the world, easing access to export markets. Increased milk output in Europe and globally, combined with high stocks of dairy products in the US and China and sluggish demand, will continue to keep prices down,” he said.

Trinity College Dublin economist Professor Alan Matthews predicted that carbon will replace milk as the new quota in Irish farming. He said the Irish agri-food sector faces the new challenge of living in a world where carbon emissions must be reduced and eventually halted.

The structure of Irish farming makes Ireland more vulnerable, especially after 2020 when emitting carbon into the atmosphere will have a direct financial cost to the taxpayer. Professor Matthews proposes the introduction of targeted subsidies to encourage farmers to adopt practices which help to build up carbon stores in soils and biomass. 

He also advocates the introduction of a carbon levy on emissions.

“I am aware that the last thing farmers want to hear about is another levy but it would be a powerful demonstration of our commitment to environmentally sustainable production,” he said.

Aidan O’Driscoll, secretary general of the Department of Agriculture, Food and the Marine, told delegates there is “no get out of jail free card” for Irish agriculture on climate change.


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