'Milk crisis set to deepen' says Dairygold boss
Dairygold boss Jim Woulfe warned that the milk price crisis may get worse before it gets better.
Mr Woulfe (pictured) said that co-ops like Dairygold will continue to underpin prices, offer extended credit to suppliers, as well as other vital supports given during the 27 month price crisis currently gripping the dairy sector.
The Limerick executive pointed out that the global market milk price is a lot lower than the 24c/l currently being paid by Irish co-ops and dairies.
But he warned that one of the key positives for Irish dairy exports - the strength of sterling - is now also beginning to weaken amid fears of a possible Brexit.
"There are a lot of challenges over the next couple of months," he said speaking at a Mallow Development Partnership event. "There is more uncertainty. We have to see a curtailment of supply. I do think this is a very long (price) cycle because it is running since about February 2014.
"The forecasters are saying we are getting some corrections in some geographic areas but it looks like the end of 2016 or even into 2017 before we get the dynamics needed to get more strength into the market."
The recent Rabobank dairy outlook also highlighted co-ops would need to continue to support prices or they would weaken further. It forecast an upward pressure on prices in 2017, with the latest Global Dairy Trade auction showing some optimism with a 2.1pc rise in dairy products.
Mr Woulfe said he also expected the EU to take further action to help struggling dairy farmers. "I believe more can be done," he said. "I believe the EU Commission need to deal with this on a month-by-month basis. We are not out of this yet. The 24c/l that is being mentioned is well, well above what the real market return is right now."