It will be the second half of the year before milk prices rise, the chair of Tirlán’s board, John Murphy, has said.
“The view is that it’s going to be the second half of this year that prices will rise. Many are predicting it could be in quarter four. But the outlook for dairy is positive.
“Big picture: dairy is not going to grow at the rate it has in the past. The outlook for dairy is good, but it’s a notoriously volatile game,” he told the Irish Farmers Journal at the Balmoral Show last week.
Prices falling back
His comments reiterated those of Tirlán CEO Jim Bergin, who said last week that it was the co-op’s hope that price was “bottoming-out”.
Murphy said the co-op has “huge empathy” for farmers whose milk cheques are being cut.
“This was the big fear last year – that prices of dairy would drop before the costs dropped, and it has been realised.
“Thankfully, fertiliser prices have dropped below €500/t; energy prices are starting to fall back; [for] feed prices, the last of the expensive stock from last year is starting to wear out and they’ll start to come back as well.
“But it’s a difficult year for dairy farmers, as costs are still stubbornly high.”
“All we can do is knuckle down. Farmers had a decent year last year and farmers are well used to this volatility of the dairy markets,” he said.
The co-op board chair said that milk price cuts in recent months have been the “biggest drop that’s ever happened in milk prices”.
“Who in their right mind would have thought you’d see milk prices dropping 20c in six or seven or eight months?
“We’re in a turbulent period, but I think we are starting to see signs that milk prices are bottoming out.
“We’ve had a couple of positive GDTs and our sense now is that we’re getting very close or, hopefully, are at the bottom.
The chair of Lakeland Dairies’ board, Niall Matthews, told the Irish Farmers Journal: “We can’t beat the market, as there aren’t huge margins in milk processing.
“We’re doing it as efficiently as possible; we’re tightening up at every opportunity. We can gain at best 0.5c/l to 1c/l at our end, but after that, it’s market-related.
“It looks like it has bottomed-out – the last couple of GDT auctions have been positive, and you’d hope that momentum will continue.”