Increase on milk justified: Bryan

The IFA president John Bryan says that, as EU dairy markets stabilise, demand picks up and global supplies fall back, the National Dairy Committee members will be meeting co-ops to look for an immediate 2c/l price increase in the February milk cheque. He said this was justified by the overall positive outlook for 2010, and necessary to bring producers closer to the 28c/l break-even target before peak production, and secure 2010 milk supplies. "EU dairy markets have stabilised in the last couple of weeks, with butter prices around 25% above intervention, and SMP prices around 12% above," said Mr. Bryan. "We're even seeing a small increase in feed SMP prices. EU SMP and cheese exports are flourishing, as our product is competitive internationally, further helped by the weaker euro, at a time when our competitors have little or no product availability. "With product supplies tightening globally, this augurs well for a better market balance for the rest of the year. For Irish dairy farmers to benefit from improved markets in 2010, co-ops must lift milk prices now," he said. Commenting on the necessity of an early 2c/l price increase in the February cheque, the National Dairy Committee chairman Kevin Kiersey added: "A price increase is not only justified on the basis of a more positive market outlook, it's essential to boost the badly shaken confidence and bank balances of dairy farmers. "Our co-ops need to pay a higher price to secure their own milk supplies: production in 2009 was three per cent down on 2008, and production in January 2010 was a massive 11% down on January 2009. "While the unfavourable weather played a part, the real reason for the massive fall back in supplies is the lack of profitability on dairy farms, which continues to this day despite limited price increases. Together with the members of the National Dairy Committee at local level, I'll be lobbying co-op board members over the next week to get them to secure absolutely essential milk price increases. An immediate 2c/l price lift will be the first step to avoid a second year of massive financial losses on farms. This must be the absolute priority for all co-op board meetings this month," he concluded. ICMSA Commenting on the decision of Glanbia to raise its February milk price to 26c a litre, Pat McCormack, the chairman of the ICMSA Dairy Committee, said all other co-ops should immediately follow and increase their February milk prices in order to alleviate some of the financial pressures on farmers and to reflect the improved market situation. While the decision is welcome, the reality, Mr. McCormack said, is that even at this price, dairy farmers are still producing milk below the cost of production. "Dairy farmers are under huge pressure after the disastrous milk price of 2009 as well as the massive level of debt at farm level due to nitrate related investments and poor weather conditions over the last 12 months. If dairy farmers are to have a future, milk prices have to return to sustainable levels quickly to allow farmers meet their debts, and the Glanbia decision should be viewed as a first step in this direction that has to be immediately followed by all co-ops, concluded Mr. McCormack.