Farm Ireland

Sunday 18 March 2018

Quota exchange demand doubles as sale levels fall

Farmer registrations up to 2,574 for stage two

Declan O'Brien and Caitriona Murphy

A major hike in demand for milk through the quota exchange has been confirmed by the Department of Agriculture.

Figures released by the Department show a massive lift in the demand for quota and a corresponding fall-off in the numbers being sold.

The number of farmers who have registered to purchase quota through stage two of the 2011/2012 exchange is 2,574.

This is more than double the 1,170 who applied to purchase milk at last year's exchange.

In contrast, there has been a sharp fall in the number of registered sellers of quota.

The registered number of sellers fell from 461 last year to 257 this year.

With many farmers in the south and east of the country looking to buy quota so as to avoid a possible superlevy bill next year, strong exchange prices are expected in these areas.

The exchange is scheduled to run at some stage over the next fortnight.

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Meanwhile, both the ICMSA and IFA have called for a further lift in milk prices for dairy farmers.

ICMSA dairy committee chairman Pat McCormack pointed out that Irish prices were lagging behind returns from international markets.

The Dutch milk price equivalent for butter and skim milk powder (SMP) was 43.9c/l before processing costs were deducted, Mr McCormack claimed.

He said a more in-depth analysis of the Dutch dairy quotations showed that between December 2 and March 2 butter prices rose €510/t, whole milk powder was up €770/t, the price of food grade SMP increased €730/t, while the sale price of whey was up €390/t.


In a clear reference to Glanbia and Kerry, Mr McCormack called on those co-op boards that had already set milk prices at 33c/l for February to immediately review this decision upwards.

"It's perfectly clear that while milk price increased in January, co-ops held back some of the market improvements and those who have already set February milk have again done the same," he said.

"This cannot continue. Co-ops and others are telling farmers that they must live by the market but yet when the market is strong, they are holding back on the benefits."

Reacting to the decision of both Glanbia and Kerry to raise their February milk price to 33c/l including VAT, the IFA's Kevin Kiersey said it wasn't enough.

"This does not fully reflect improving market returns. Co-ops must lift prices by 3c/l at least, to 33c/l plus VAT, to ensure farmers, many of whom are still dealing with the financial consequences of the 2009 income crisis, benefit from the real increase in market prices."

Mr Kiersey said that the average combined returns for SMP and butter had lifted by 8.6pc between January and February, and the recent 5.9pc increase in the average Fonterra auction price confirmed the strong market outlook to November of this year at least.

However, Michael Barry of IBEC said that the latest commodity price increases did not guarantee higher returns for processors.

He said the continued release of 7,500t of SMP by the Commission each week had undermined the stability of the market.

Mr Barry added that the current increase in commodity dairy prices had still not been felt by EU consumers. He said the impact of these price increases on demand would be difficult to quantify.

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