Cautious optimism for global dairy commodity prices

Wednesday, 7 January, 2015

Ulster Farmers’ Union Dairy Chairman Jonathan Moore has said that the increase in the latest Fonterra Auction (Tuesday 6th January) is welcome news, with the first trading event of 2015 displaying positive commodity price increases with the average index up 3.6% from $2,609 to $2,709/tonne.

Jonathan Moore said: “There is no denying that that dairy industry is going through a difficult time with local dairy farmers feeling the effect of a substantial downturn in farm gate milk prices which as a result has seen many dairy farmers experiencing cash flow difficulties.  In 2014, local dairy farmers have witnessed dairy commodity prices falling to half what they were this time last year, bringing about a substantial drop in their farmgate milk prices.  As lower milk prices impact upon local dairy farms, they will need support from their banks over the next number of months to help alleviate some of the resulting pressures.  The UFU have been active lobbying, local politicians, the DARD Minister Michelle O’Neill and the local banks to raise farmers concerns and discuss what can be done in helping alleviate some of the financial pressures being faced.  

“We are hopeful that the dairy industry has turned a corner in terms of seeing a halt in falling commodity dairy prices with signs that markets are beginning to tighten.  However we need to be realistic in that, according to Radobank in their Q4 Dairy Report, whilst there are signs of price stabilisation, it may take longer for milk prices to climb off the floor where they are at present.  It is also important to mention that, whilst many other EU milk producing regions are only beginning to see the impact of falling prices as we enter 2015, here in Northern Ireland we have seen ongoing price reductions for the most of 2014 which is why we are repeating our calls for a review of intervention levels.”