Milk price will settle at higher level - Moloney

By Pat O'Keeffe

Milk prices will settle at a level about 20% above the previously expected baseline, according to Glanbia chief executive John Moloney. Addressing the Agricultural Science Association conference, he said: "We're not going back to previous levels.

"Long-term milk price trends will be higher, but it's all predicated on continued world economic growth,'' he said. "The powder price will come back in the medium term, but not to levels seen previously.''

However, he did caution that "butter is vulnerable and will remain so''.

The US will be an increased force on world markets, Moloney told delegates in a strong presentation. "In July 2007, the US was a net exporter for the first time,'' he pointed out. To highlight their scale, he said that 70% of US milk is produced by just 4% of suppliers.

A key point made by John Moloney was that "the balance of power between retailers and suppliers is changing''. He said that retail consolidation had meant that there were three dominant players on the Irish market.

It was noticeable that John Moloney appeared somewhat downbeat about the future place of brands. He highlighted the "cost of sustaining brands versus the emerging opportunities'' and said that 70% of US cheese is now consumed in the food service channel.