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Co-ops Must Hold Milk Prices

19 December 2008

IRELAND - Current milk prices will squeeze farmers’ profitability hard next Spring, with seasonally lower constituents and higher volumes produced according to the Irish Farmers Association.

The Irish Farmers Association National Dairy Committee Chairman Richard Kennedy farmers would definitely not be able to afford further milk price cuts.

He urged co-ops to engage actively with the current ICOS initiative. They must look at every way they can save on their own costs by addressing their own internal inefficiencies ruthlessly, and by coming together as much as possible to collect, test independently, process and market milk.

He added that he felt the mood in Brussels was more favourably disposed towards providing targeted market supports, but the dairy industry needed to get after them by actively and earnestly bidding for export refunds to kick start EU exports.

"Farmers have simply not yet realised how poor their current milk price is. By next month, the Glanbia 2c/l top up will have come to an end, and normal levels of spring constituents will cut sharply the average prices paid by all co-ops, at a time when volumes pick up," Mr Kennedy warned.

"The evidence shows that EU markets have stabilised with lower returns in the majority of member states leading to reduced milk production. A recent Rabobank report predicts a rebalancing of markets in 2009. However the short term will be difficult with thin trade, likely resort to Private Storage for butter and intervention for SMP, and stocks having to be disposed of," Mr Kennedy said.

"Meanwhile, Irish co-ops must not undermine the battered confidence of their suppliers, and ensure they can remain profitable until markets recover. They can do so by ruthlessly hunting down every last bit of waste within their system, and by co-operating to collect and process milk in the most efficient way, and to ensure it picks up the highest possible market return," he added.

"In this respect, we totally support the current ICOS initiative, and urge all co-ops to engage actively with it," he said.

"Protecting one’s kingdom and prevaricating is simply not on when the livelihood of dairy farmers is at stake. Without profitable dairy farmers, we can have no dairy industry!" he concluded.

TheCattleSite News Desk



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