Chinese demand will keep dairy markets ‘well balanced’

demand-cows

However, the bank’s quarterly review of the global dairy sector warned that higher than expected production in New Zealand at the end of their production season had “applied the brakes” to the 2016 price recovery.

The analysis also cited the continuing divergence between butter fat and protein prices as a serious drag on dairy markets.

It predicted that EU intervention would again be required to take surplus protein stocks through the summer.

Finding an outlet for the 350,000 tonnes of skim milk powder currently in intervention would also prove challenging, the report stated.

The review forecast that European production this spring would be 1pc back on 2016 levels despite stronger prices.

However, it cautioned that “milk could still flow” in Europe in response to the lift in returns, although cow numbers have fallen in France, Germany and the Netherlands.

Kiwi ‘bounce’

The review noted that New Zealand production could “bounce higher than expected” during the 2017/18 season now that dairy farmer margins have recovered.

Meanwhile, the ICMSA has called for an ‘across-the-board’ move to a 32c/l milk price for March supplies.

The association’s dairy committee chairperson, Gerald Quain, said “the very healthy profits declared by several processors in the last few weeks” clearly demonstrated that improved returns to farmers were justified.

Mr Quain contrasted the “precarious” nature of dairy farmers’ finances with the radically improved co-op situation, and claimed the recovery in processors’ finances was due in part to their consistently underpaying their suppliers.

“We are now back demanding a 32c/l for last month’s milk supplies and we note that, in the interim, several Irish co-ops have a declared extremely healthy profits figures for 2016 that make for a very stark contrast indeed with the situation their suppliers find themselves in,” said Mr Quain.
Source: Indpendent

Link: http://www.independent.ie/business/farming/dairy/chinese-demand-will-keep-dairy-markets-well-balanced-35610763.html

 

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