Milk prices could fall to 2009 levels warns Lakelands boss

Tom Moran, Department secretary general, with Minister for Agriculture, Simon Coveney, and Gerry Boyle, director of Teagasc, at the National Dairy Conference 2014. Pic. John T Ohle Photography.
Tom Moran, Department secretary general, with Minister for Agriculture, Simon Coveney, and Gerry Boyle, director of Teagasc, at the National Dairy Conference 2014. Pic. John T Ohle Photography.

Lakeland's boss Michael Hanley said that the EU needs to tap into superlevy fines collected in recent years to support collapsing milk prices.

With further price falls widely expected in the coming weeks, the Lakeland's CEO said that there was a possibility that prices could collapse to the lows last seen in 2009.

"The price that butter and skim milk powder made in the most recent Global Dairy Trade (GDT) auction was the equivalent of 19c/l. There's nothing stopping prices dropping to those levels if Brussels doesn't wake-up and accept what's happening," said Mr Hanley.

"They collected €400-500m in superlevy fines in the last year, and they'll probably collect the same again this year. A large part of the problem was created by Brussels when Russia banned EU food exports. It's not right to let farmers shoulder all the fall-out from this," he said.

While Mr Hanley had earlier told delegates at the National Dairy Conference that his biggest fear post quota was getting enough milk to meet demand, the northern dairy processor boss claimed that there was a massive short-term over-supply of the order of 25pc.

"The EU hasn't stepped in to support dairy markets in five years, but if they continue to stand by, prices will have to drop to 19c/l before intervention kicks in. Once quotas go next April, the EU will have cut it's last ties with the sector. But until that day arrives, they should be obliged to do more to help it."

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