Tough year lies ahead in dairying

GALWAY’S dairy farmers look to be facing into another tough year in 2016 given the low base price of milk, despite hints of recovery on the world market, according to the county’s IFA Dairy Committee Chairman.

Charlie Whiriskey told the Farming Tribune that given the low base mark of 26c/l for milk that farmers would be on at the start of 2016, the dairy sector would be facing into another challenging year.

“While there have been some small encouraging signs that world markets are starting to pick up it could be into the third quarter before this translates into a better price for the producer.

“In the end, it all comes back to the old economics rule of supply and demand but there are some signs that the Chinese are buying again, and given the volume of this market, that is a positive sign,” said Charlie Whiriskey.

He said that based on the Teagasc break-even price of 25c/l, it was quite obvious that the margins were very tight for producers and especially those who were paying off super-levy bills and those who had undertaken capital investment.

Milk prices peaked in Ireland and in most EU countries in early 2013 where the price approached the 40c/l mark but since April of 2013, the price has fallen steadily dipping to as low as 25c/l.

Charlie Whiriskey also urged Galway’s dairy farmers to sign up to the National Quality Assurance Scheme by next June to ensure that they could continue to draw down their 0.2/l quality bonus.

“It’s just good housekeeping to ensure that dairy farmers don’t lose out on this – from next June, they must be in the Quality Assurance Scheme to draw this down,” said Charlie Whiriskey.

Galway IFA Chairman, Pat Murphy, said that dairy farmers across Galway and indeed the whole country were facing into another tight financial year, although there were some indications of a recovery in world markets.

“The base price of 26c/l is just above or on the break-even point for most producers. We are hoping to see an improvement in this base line price for milk through the course of 2016,” said Pat Murphy.

According to the EU Commission’s medium-long term outlook for the agricultural sector, published earlier this month, they predict that any price recovery in milk will only be slow through 2016.

They predict that the milk prices being paid through next year ‘will not rise significantly’ and that it could be 2021 before any major forward move in the market will occur.