'Very unflattering' milk price comparison with New Zealand - ICMSA

Based on the latest 6.6% increase in the GDT (Global Dairy Trade) auctions and the milk prices being quoted on European spot markets, there is growing evidence to suggest that the lift currently underway in dairy markets will continue, according to Gerald Quain Chairperson of ICMSA’s Dairy Committee, who continued to say that these increases must be reflected “at the first opportunity” in the prices paid to farmers – most specifically by those Co-ops currently paying less than 23 cents per litre.

The ICMSA Committee Chairperson said that Dutch Dairy quotations have rebounded in the last number of months with butter/SMP returns up 21% since their lowest point in March and WMP up 20% since its lowest point in mid-April.

While acknowledging that these percentage increases are from a low base Mr Quain observed that they nevertheless represented an increase of 5 cents per litre up to 25cpl at farm level inclusive of VAT.

He said that a number of factors were combining to indicate that better returns are already achievable: a tightening occurring in the global supply situation across Europe and New Zealand, lower milk production in Australia due to adverse weather, and a ‘pick-up’ in demand coming from markets.