The results of the last two Global Dairy Trade (GDT) events should give reassurance to farmers that milk prices will remain reasonably steady over the coming months. By Richard Halleron.
In fact, it has been a pretty good news fortnight for the milk sector overall.
ICMSA President John Comer keeps telling us that sentiment is now a key driver, where global dairy markets are concerned. And he’s right.
Last week was marked by the announcement from Unilever that it was selling its ‘spreads’ business. The company confirmed that sales of products, such as Flora and Stork margarine, were falling and – in fact – had been doing so for the past 20 years.
This may well have to do with the fact that fewer of us now enjoy breakfast in our homes; the preferred option for many is to eat on the move.
However, indicators from the United States point to a significant resurgence in dairy fat sales. This is based on the products’ natural image and their positive re-assessment as contributors to a healthy diet.
Dairy products are unique in delivering dietary protein, energy and minerals. The Chinese want to feed their babies more of them, because of milk’s inherent nutritional properties. And with the projected baby boom in that country, the only direction of travel for global dairy sales should be upwards.
Meanwhile, the Netherlands is facing up to the prospect of reducing its dairy herd by some 175,000 head over the coming months. The move has been precipitated by the threat of its Nitrates’ Directive derogation being removed by the EU Commission.
In tandem with this development, it has also come to light that Dutch consumers strongly prefer milk and dairy products emanating from cows that spend a high proportion of their time actively grazing grass.
Surely, this represents an opportunity for the dairy sector here in Ireland to market its wares accordingly.
The impact of the floods in New Zealand has been well profiled over recent days. It is inherently wrong to ‘gloat’ over the troubles endured by farmers in other countries. And I would never do that.
Let’s hope, for its sake, the prediction that dairy output in New Zealand may be significantly curtailed over the coming months is wrong. But the reality remains that the upward price sentiment expressed at the last GDT event reflected the potential problems which Kiwi milk producers might experience over the coming months.
But, New Zealand aside, it hasn’t been a bad fortnight for the Irish milk industry. Let’s just hope that the good times continue.