9 May 2018

Milk Production Controls 'Inevitable' to Counter Price Volatility

News

The "honeymoon is well and truly over" for dairy farmers, who are now facing a very challenging period, IFA National Dairy Committee chairman Tom Phelan has warned.

Mr Phelan told a recent meeting in Limerick that a voluntary milk production control mechanism may become "inevitable" to counter price volatility in the sector.

Price reductions of the scale forecast this year threaten to slash milk sales from a typical 100-cow herd by up to €1,000 a week compared to 2017.

The IFA Dairy Committee has agreed to support a voluntary system of production management across the EU, but Mr Phelan stressed that the association would not support mandatory milk output cuts.

Any initiative would include some form of production management tool to restore market balance following the surge in EU milk production in the post-quota era, and the growth in production globally, the IFA representative explained.

"We do need a more sustainable model of producing milk going forward," Mr Phelan said.

However, he argued that such a scheme should not impact on Irish producers, because of their advantage of efficient grass production and low carbon footprint.

Looking to the immediate outlook for milk prices, Mr Phelan said there were mixed signals coming from the markets.

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