‘THERE are grounds to believe that 2017 will be a good year for dairy farmers,’ the chief executive of the Carbery Group, Dan MacSweeney, told The Southern Star this week.
While acknowledging that it is difficult to predict dairy markets beyond six months, he said that they had improved considerably over the past number of months: ‘This improvement is not due to any noticeable increase in demand, but to a reduction in milk supply from some of the key milk-producing regions globally.
‘Big producers in Northern Europe, such as Germany, France and the UK, are running at minus 5% over recent weeks. This reduction is very much price-driven.
‘New Zealand has had very wet weather in October and this depressed milk supply by 5%. Conversely, the USA continues to grow supply by around 2% annually, which is due to very favourable feed prices.
‘So, as we move into 2017, there is more balance in the market than during 2016 and dairy market pricing will reflect this,’ Dan MacSweeney predicted.
Meanwhile, the second meeting of the Dairy Forum with key stakeholders from the Irish dairy sector, hosted by Minister for Agriculture, Food and the Marine, Michael Creed, TD, last week discussed the outlook for the Irish dairy sector in 2017 and found grounds for cautious optimism. As part of commitments given in the current Programme for Government, the forum addresses the need for a collaborative strategic approach to the issues facing the sector, including market volatility.
The Minister said that the Dairy Forum is more important than ever, given the extraordinary challenge facing Ireland’s agri-food sector in the wake of the UK’s decision to leave the EU: ‘Challenging times like these call for a strategic approach and vision.’
Commenting on the market outlook for 2017 – for which the Teagasc has forecast improved prices and incomes for dairy farmers – Minister Creed said that ‘recent price trends have been positive, but there is clearly no room for complacency. While the medium-term prospects for global dairy markets are good, the sector needs to work cohesively to deal with upcoming challenges such as price volatility and the effects of Brexit.’
He said that he had been working closely with his Northern Ireland and UK counterparts, Michelle McIlveen and Andrea Leadsom, respectively, on these issues.
The Minister also updated the forum on recent measures to assist the dairy sector, including the new low-cost credit scheme to be rolled out by SBCI in the near future, as well as the advance payment of €1.2billion in 2016 BPS payments. Access to finance was also discussed with an exchange of views with the main banks now a firm part of the agenda at each dairy forum.