ICOS warns co-ops may run out of cash to support milk prices
The Irish Co-operative Organisation Society (ICOS) made the comments as part of a new pessimistic assessment of global dairy markets, referring to the 2009 crisis.
According to ICOS’s dairy policy analyst and incoming chief executive TJ Flanagan, the latest dairy commodity trading data from the EEX Exchange demonstrate very poor prices at a “level not seen since 2009”.
This week’s butter and skimmed milk powder indices “suggest a value of around 20c/l”, while the latest drop in Ornua’s PPI index came to a return of 25c/l and EU-wide prices are 13% lower than the average of the last five years.
One can only hope that the global supply/demand relationship comes back into balance as soon as possible because the degree to which co-ops can continue to support milk prices from their own reserves is surely limited
ADVERTISEMENT
Flanagan said such low prices could be “enormously damaging to farmers’ livelihoods”, adding that “the degree to which co-ops can continue to support milk prices from their own reserves is surely limited”.
Comparing the current situation to the 2009 crisis, the ICOS analyst noted that Irish milk processors had then supported milk prices to the tune of over €100m the year before, leaving them with “bare cupboards” when support was most needed.
Unless markets rebalance quickly, he warned, co-ops may run out of cash before the crisis hits rock bottom – just like they did in 2009, when the combination of low prices and bad weather lead to “a 3% reduction in Irish milk supplies”.
This content is available to digital subscribers and loyalty code users only. Sign in to your account, use the code or subscribe to get unlimited access.
The reader loyalty code gives you full access to the site from when you enter it until the following Wednesday at 9pm. Find your unique code on the back page of Irish Country Living every week.
CODE ACCEPTED
You have full access to the site until next Wednesday at 9pm.
CODE NOT VALID
Please try again or contact support.
According to ICOS’s dairy policy analyst and incoming chief executive TJ Flanagan, the latest dairy commodity trading data from the EEX Exchange demonstrate very poor prices at a “level not seen since 2009”.
This week’s butter and skimmed milk powder indices “suggest a value of around 20c/l”, while the latest drop in Ornua’s PPI index came to a return of 25c/l and EU-wide prices are 13% lower than the average of the last five years.
One can only hope that the global supply/demand relationship comes back into balance as soon as possible because the degree to which co-ops can continue to support milk prices from their own reserves is surely limited
Flanagan said such low prices could be “enormously damaging to farmers’ livelihoods”, adding that “the degree to which co-ops can continue to support milk prices from their own reserves is surely limited”.
Comparing the current situation to the 2009 crisis, the ICOS analyst noted that Irish milk processors had then supported milk prices to the tune of over €100m the year before, leaving them with “bare cupboards” when support was most needed.
Unless markets rebalance quickly, he warned, co-ops may run out of cash before the crisis hits rock bottom – just like they did in 2009, when the combination of low prices and bad weather lead to “a 3% reduction in Irish milk supplies”.
If you would like to speak to a member of our team, please call us on 01-4199525.
Link sent to your email address
We have sent an email to your address. Please click on the link in this email to reset your password. If you can't find it in your inbox, please check your spam folder. If you can't find the email, please call us on 01-4199525.
ENTER YOUR LOYALTY CODE:
The reader loyalty code gives you full access to the site from when you enter it until the following Wednesday at 9pm. Find your unique code on the back page of Irish Country Living every week.
SHARING OPTIONS