Milk price 'not certain to rise'
IDB predicts returns to stay at 25-26c/l
Published 26/01/2010 | 05:00
A milk price of 25-26c/l is being forecast by the Irish Dairy Board (IDB) for this year.
In a pessimistic assessment of the dairy markets for the year ahead, which was delivered to board members recently, the marketing body claimed that a sustained price recovery was not guaranteed.
An IDB source told the Farming Independent that what underpinned the board's view were the fears that a sharp fall in grain prices and improved milk returns would prompt a jump in US production.
The fact that dairy buyers have not been as active this month as they were over the final quarter of last year was seen as another reason to worry.
However, this negative view is not shared by some industry sources. One leading figure in the processing sector said that buyers always "sit on their hands" at the start of the year.
With New Zealand also experiencing a very dry summer, he said overall production could be well back in the medium-term if drought conditions take hold.
"I can't see consumption of dairy produce increasing significantly, so price will be driven by production rather than demand," he said.
However, Michael Barry, director of the Irish Dairy Industries Association (IDIA), insisted that a supply shortage -- which could cause prices to peak again -- would be very damaging for the sector.