Dairy bosses pessimistic about milk price outlook
Carbery CEO says Teagasc forecast of 1c per litre lift in average prices this year looks increasingly unlikely
Published 20/01/2016 | 02:30
Predictions that milk prices will increase by 1c/l on average this year are beginning to look overly optimistic, according to some of the country's top dairy bosses.
Carbery CEO Dan McSweeney said that he was "amazed" by the recent outlook posted by Teagasc.
"I just couldn't understand it - I don't know what planet they are on. The market is returning less than 24c/l at the moment, and spot prices are 13-16c/l in Holland," said the west Cork-based CEO.
"We were subsidising milk prices by 2-3c/l last year, but the market has weakened since then. Even though China still isn't back buying strongly, demand overall isn't too bad. It's all about [over] supply. Milk production in both Germany and Britain is up 4pc.
"The talked about recovery in prices keeps getting pushed out by the likes of Rabobank. Originally it was the first half of 2016, now it's the last quarter," he said.
Irish co-ops continued to sell milk powder into intervention this month, bringing the total to over 2,000t at the equivalent of 25c/l.
The latest Ornua milk price index equates to 24.6c/l - 3c/l lower than the average returned by the marketing body to co-ops in 2015.
"The news isn't positive, and it's very hard to see any upside in the first half of 2016. In fact, it might be more likely that there will be a further drop, so 24-25c/l is our prediction for the next six months," said Ornua's director of dairy trading and ingredients, Bernard Condon.