IFA Urge Co-ops to Hold Milk Prices

IRELAND - IFA National Dairy Committee Chairman Richard Kennedy today (Friday) urged all co-ops to hold their milk price until Spring 2009. He said the announcement by the EU that it would bring forward the Aid to Private Storage scheme for butter to 1st January 2009, 2 months earlier than usual, was an important step to stabilise dairy markets.
calendar icon 14 November 2008
clock icon 2 minute read

He added that the ongoing strengthening of the US Dollar also made European dairy products more competitive on the world market while reducing the competitiveness of US products.

“Bearing in mind that production costs have increased by around 6c/l in the last 12 months, and that farmers cannot afford any further price cuts, I urge all co-ops to hold milk prices until Spring 2009,” Richard Kennedy said.

“The Aid to Private Storage scheme allows traders and manufacturers to put butter in storage for a number of months, receive a subsidy towards the cost of storage, and bring the product out to fulfil contracts at a later stage, when prices are higher and supplies less plentiful,” Richard Kennedy said.

“This scheme normally only comes into play from 1st March, but with this latest decision, the EU Commission is making it available from 1st January, with butter manufactured during the month of December also qualifying,” he added.

“While there is less butter being produced this time of year than in Spring, bringing the scheme forward will help focus the minds of buyers straight away, which will undoubtedly help stabilise markets into 2009,” he said.

“In addition to this, the US$ is continuing to strengthen, with today’s rate against the Euro at US$1.25. This will help dairy markets further, by making EU dairy products more competitive on the world market. It is also helping to reduce the involvement of the US on the world market, which played a massive role in the market difficulties of the last 12 months,” he continued.

“I believe these developments will help stabilise dairy markets and renew confidence in the dairy sector,” he said.

“Co-op boards are meeting this week to decide on the October milk price. They must clearly decide to hold the price they will pay for milk until Spring 2009,” he concluded.

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