Farm Ireland

Tuesday 24 October 2017

Single digit growth in milk prices predicted for European farmers

Stock image. Picture: Danone/Thomas Haley
Stock image. Picture: Danone/Thomas Haley
Margaret Donnelly

Margaret Donnelly

Danone is predicting a ‘steep rise in milk prices over the year’ for some milk producing regions, but also warns that worldwide economic conditions are likely to remain volatile’.

In its latest results, French dairy giant Danone says that worldwide economic conditions will remain particularly volatile, when announcing results today of almost 10pc growth in earnings per share.

In relation to milk prices, it says that there will be a low to mid-single digit increase in European and US milk prices, while a strong rise will be seen in emerging countries such as the Latin America and former Soviet states.

Some 80pc of Danone powders for infant formula for European markets are sourced in Ireland through its Macroom plant, while its Wexford plant produces infant formula for markets such as China, and Europe.

Sales of infant formula rose by 3.5pc in 2016, despite a decline in ‘indirect’ sales to China. Danone also reported that a fast-changing regulatory environment in China was also adding volatility to the sector.

It also reported that its fresh dairy products reported sales up 2pc with main growth recorded in the former Soviet states and North America.

As part of its strategy, Danone is looking to reduce its cabon footprint with plans to reduce its net carbon emissions to zero by 2050.

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