Milk prices will not recover as hoped this year, due to “very quiet” dairy markets, according to Ornua global ingredients managing director, Bernard Condon.
“It doesn’t, at this point, look like the recovery we were hoping for will come. So, we’re just calling it that we’re more or less trading sideways now out until the end of the year,” he told farmers at the Teagasc dairy open day in Moorepark this week.
Condon acknowledged that the latest Ornua purchase price index (PPI) had projected a “modest increase”, based on the “expectation that market prices would probably start to stabilise and build a bit out through year-end”.
“I’d have to say if we were doing that today, it would probably just be a straight line,” he said.
Recent demand
This projection of static dairy markets comes as a result of international buyers buying “hand to mouth”, warned Condon.
“[Dairy] commodity prices had firmed in the last month, but just recently things have got very, very quiet. Buyers will come back, but it is very, very quiet at the moment, and if you were trying to sell commodity product today, you would probably struggle to sell a big volume at reasonable prices. It’s just to shout out a bit of a warning that things are quiet, but hopefully we’ll get through this phase,” he said.
Reduced dairy demand is coming off the back of “inflation issues” and an increased consumer cost of living.
“We’re seeing own label sales increasing to the detriment of brand sales.
“We’re also seeing more shoppers going to discounters, rather than the standard retail channels.”
Read more
Dairy Trends: GDT holds steady while spot prices drop
Milk prices will not recover as hoped this year, due to “very quiet” dairy markets, according to Ornua global ingredients managing director, Bernard Condon.
“It doesn’t, at this point, look like the recovery we were hoping for will come. So, we’re just calling it that we’re more or less trading sideways now out until the end of the year,” he told farmers at the Teagasc dairy open day in Moorepark this week.
Condon acknowledged that the latest Ornua purchase price index (PPI) had projected a “modest increase”, based on the “expectation that market prices would probably start to stabilise and build a bit out through year-end”.
“I’d have to say if we were doing that today, it would probably just be a straight line,” he said.
Recent demand
This projection of static dairy markets comes as a result of international buyers buying “hand to mouth”, warned Condon.
“[Dairy] commodity prices had firmed in the last month, but just recently things have got very, very quiet. Buyers will come back, but it is very, very quiet at the moment, and if you were trying to sell commodity product today, you would probably struggle to sell a big volume at reasonable prices. It’s just to shout out a bit of a warning that things are quiet, but hopefully we’ll get through this phase,” he said.
Reduced dairy demand is coming off the back of “inflation issues” and an increased consumer cost of living.
“We’re seeing own label sales increasing to the detriment of brand sales.
“We’re also seeing more shoppers going to discounters, rather than the standard retail channels.”
Read more
Dairy Trends: GDT holds steady while spot prices drop
SHARING OPTIONS