Bouyant dairy prices could add extra €80m
The IFA has claimed there is scope for up to €80m or 1.6c/l in additional payments to be passed back to milk producers for 2013 and into 2014 to reflect the continued buoyancy on world dairy markets.
The farm organisation said it would continue to lobby co-ops and dairy companies to pass on this additional income.
IFA dairy committee chairman Kevin Kiersey said the Fonterra auction prices for last week were more or less unchanged and showed that global dairy markets were holding up relatively well despite significantly increased milk output in many of the main production regions.
Mr Kiersey said this trend was also clear from the recent EU average dairy commodity prices, which had only seen modest adjustments, as reflected in the IDB index.
"In the latest Fonterra auction, cheddar and butter prices showed the greatest price recovery, 4.5pc and 1.7pc respectively, with some small increases in SMP9 skim milk powder) and MPC70 prices also," Mr Kiersey said.
"There is certainly little enough evidence from this result that the rising milk output is creating price pressure."
"Meanwhile, on European markets, despite some easing, dairy product prices reported by the EU Commission for week ending November 10 are still historically high.
"Butter is over €4,000/t, SMP over €3,000/t, and together they still return a gross 46c/l before processing costs.
"Cheddar cheese prices have continued to rise to €3,990/t, and with firm whey powder prices of around €1,000/t, they return a gross 47c/l before processing costs," he added.
"Depleted stocks are being replenished the world over allowing commodity prices to stay stronge for longer than expected," he said.