NI: Commission positive on milk outlook

By Pat O'Keeffe

The European Commission has predicted a steadily improving dairy market balance over the next six years.

In their first forecasts since the Mid Term Review, they say that milk prices will fall but not by as much as the phased 22% cut that commences this July.

The outcome of the forecast is proof that there is no reason to talk down peak period milk prices, according to IFA National Dairy Committee chairman Michael Murphy.

The Commission forecasts that, by 2010, consumption of butter and skim milk powder should exceed supply, leading to intervention stocks selling out.

In particular, the Commission predict that the cut in prices under the Mid term review is likely to boost demand for cheese and fresh dairy products. In particular, cheese demand in the new Member States is projected to increase by 20% in six years.

Speaking at the end of a series of meetings with co-ops, the IFA's Michael Murphy said that most co-ops agreed it was unlikely there would be any reason to adjust milk prices for the next 2 months at least, as the butter intervention limit was unlikely to be reached before 1 July.

"Despite recent Commission decisions on export refunds and casein aid, reliance on SMP and butter intervention remains at a fraction of what it was 12 months ago. At this rate it is unlikely that the 70,000 tonne butter limit will be reached by 1 July, even with the 10 new central Europe member states on board from May,'' Michael Murphy said.

• The IFA milk price campaign continues with two public dairy meetings on milk price on 26th April in the Brandon Hotel, Tralee and on the 29th April in the Newpark Hotel, Kilkenny, at 8.30 pm sharp.