Dairy price slump set to continue for another six months
The 'collapse' in milk prices, which is estimated to have cost the rural economy up to €1bn in 2015, will continue in the first half of 2016, a national dairy leader has warned.
ICMSA president, John Comer told the association's AGM in Limerick that the "losses will be greater in 2016", adding that dairy farmers are looking to the New Year with "absolute foreboding".
His comments follow a warning from Ornua's Joe Collins that the worldwide slump in dairy prices is unlikely to pick up until the second half of 2016.
Rabobank dairy analyst Kevin Bellamy anticipates a "substantial price recovery" midway through next year, with the expectation China will have worked through its stocks and be returning to the market.
Mr Comer last week reiterated the ICMSA's call for a policy change on the safety net of 28c/l. "The current toolbox of policies is totally insufficient to address the kind of farm income volatility that looks increasingly likely to become a feature of our working lives," he said.
Mr Comer said that "milk price has fallen by up to 40pc while retail prices have only fallen by 2pc at EU level" and farmers have been hammered by the links further along the supply chain that "bricked off" their own margins.
He stressed farm input costs increased by 11.7pc between 2010 and 2015, with fertiliser prices up over 22pc and feed prices nearly 18pc higher.