IFA dairy chair Tom Phelan said current market indicators suggest better milk prices were possible for May. He urged co-ops to pay attention to Irish (Ornua PPI), European (EU MMO, spots and futures) and international (GDT) indicators as well as supply and demand trends.

There is scope for increases of at least 1c/l, with some co-ops needing to do better than others.

“Trends are starting to show a level of recovery in some European countries, with March output up 1.2% compared with March 2018.

“However, in New Zealand (-7.7% for April) and Australia (-13.7% for the same month, and 7.3% back year to date) supplies are back very dramatically.

“In the US, April 2019 supplies continue to struggle, up only 0.3% on April 2018,” Phelan said.

Demand

“Demand is mixed, but China continues to increase imports significantly, with powders and infant formula imports up by more than 30% for the first quarter of 2019, and with rising oil prices, affordability is improving for oil exporting countries,” he said.

“Our comparison between April milk prices and the main national and international market indicators show that some co-ops currently pay less than the Ornua PPI. It also shows that all the main co-ops currently pay less than the EU MMO for the dairy commodity product mix for mid- to late May,” Phelan said.