'Pessimistic' outlook on milk prices until July
Milk price forecasts are not likely to improve significantly for the first half of 2014 despite EU exporters receiving a double boost this week.
A 10pc devaluation in the euro as a result of the EU embarking on a €60bn per month economic stimulus is set to help dairy exporters move product, and a change in government in Greece is expected to maintain pressure on the currency.
Meanwhile, New Zealand output has been hit by drought conditions in the southern half of the country.
However, forecasters still predict a below-cost price of 27c/l for Irish dairy farmers in 2015.
"We're still pessimistic about any improvement in milk prices in Europe before July," said Rabobank's senior milk analyst, Kevin Bellamy.
He believes that the continuing absence of Chinese buyers, coupled with the ongoing ban on EU dairy products in Russia will hamper prices in the short-term.
"The real impact of the Russian ban is only going to be felt by European dairy processors this spring when the peak cheese-making season kicks off," said Mr Bellamy, pointing to European dairy processors' traditional reliance on Russia for 30pc of their export cheese sales.
"However, there appear to be some high level discussions with Russian authorities, which may ease some of the restrictions earlier than we were otherwise expecting," he added.