Global market conditions are translating into really strong prospects for milk price for 2022, according to the IFA.
Considering this market, IFA dairy chair Stephen Arthur said milk processors must pay a milk price in excess of 40c/l for November milk.
Arthur made his comments following an announcement by Ornua of their PPI for November which he said “demonstrates” impressive gains in milk price since October.
The Wicklow farmer said: “At 131.9, the milk price equivalent is 40.3c/l. This rises to 44.31c/l when adjusted to include the Ornua value payment.
“Milk processors must pay a milk price in excess of 40c/l for November milk.
“The global market is very positive at the moment and our industry is very well positioned to take advantage of this.”
International dairy markets
International dairy markets continue to perform strongly with the New Zealand GDT index up 14% in the past three months, according to the IFA.
US milk production has slipped back 0.5% in October due to a reduction in cow numbers
“Despite rises in global commodity prices, global supply remains sluggish. US milk production has slipped back 0.5% in October due to a reduction in cow numbers, New Zealand milk production is back 3.3% and European supplies remain steady.”
“Typically, as milk price rises, global supply increases but this year we are seeing supply remain steady. This has translated into really strong prospects for milk price for 2022.”
All the milk supply and demand data available indicates “a steady upwards trajectory” on price which will continue into the first quarter of 2022, says Irish Creamery Milk Suppliers Association (ICMSA) dairy committee chair Ger Quain.
Quain described how it was “obvious to his team as early as three weeks ago that milk price was going to break 40c/l this side of Christmas”.
Milk price is not the “current challenge” for the dairy sector in light of “runaway input inflation”, according to the dairy farmer.
He said input cost inflation is “actually outpacing the rising prices”.