Dairy markets are now experiencing a stabilisation and an increase in farmgate milk prices is anticipated as we move towards the end of the year, according to Bord Bia dairy sector manager Liam McCabe.

With global milk supply set to slow down, the supply and demand balance will be tipped in favour of the exporters and prices will begin to rise again, McCabe told a recent Teagasc webinar looking at the dairy market outlook for the second half of the year.

“When we look at fundamentals and in terms of prices, the signals that we are getting is some green shoots and prices have begun to stabilise.

“We would hope that global commodity prices have hit a bottom at this point and from here we would hope that, as we move towards the end of the year, they would move upwards again,” he said.

Higher cow slaughter in the US and New Zealand is another indication that market prices will go in the right direction, he added.

“That typically tells you that there is something happening in those markets.

“For the first half of this year, we do anticipate that there will be growth trajectory [in milk supply] but certainly by the time we get to quarter four those key dairy-producing regions will have started to slow down,” he said.

Stabilisation

The stabilisation of markets is a good thing, McCabe said, adding that generally when markets stabilise an increase in price is on the way.

“I know that’s of little consolation to Irish dairy farmers as we are crossing peak at the minute, but that is the hope, as there is less milk in global markets, we will see stronger prices,” he said.

These prices, he expected, will be seen in quarter three and into quarter four.

2022 prices

Comparing 2022 milk prices across the main exporting regions, McCabe said that there were similar enough price fluctuations across the board.

“In general, the prices were reflective across the major exporters.

“New Zealand saw the price fall a little earlier than we did. That was probably due to our supply pattern because they had more milk last back end when they were crossing their peak, whereas we were going the other way,” he said.