#Dairy leaders cautiously upbeat about 2014 prospects

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Dairy leaders are cautiously optimistic about prospects for the industry in 2014, despite talk among some processors that milk price cuts may be necessary.
 
Farmers For Action (FFA) chairman David Handley said dairy farmers were still in a “fragile” position after the welcome price rises last autumn.
 
Following a difficult 2013, Mr Handley was feeling “optimistic” about the prospects for dairy farmers this year.
 
However, he warned that dairy farmers would have no alternative other than to renew their protests if prices are cut.
 
“I’m worried what could happen this spring if there is a massive amount of milk produced and not enough market for it. We could find that the domestic market becomes overloaded,” said Mr Handley.
 
“One or two processors are indicating they are going to cut the milk price. Representatives have been going on to farms and saying they feel prices have to come back about 1.5p/litre.
 
“If that nonsense is starting, we are going to be in trouble again. You could see 3-4p/litre being wiped off the milk price and that would be enough to wipe out about 60% of dairy farmers.”
 
On average, dairy farmers are receiving 32-33p/litre for their milk, which is just about covering the cost of production.
 
“Current prices are only giving a return to about 10% of farmers who are ultra efficient or are diverse enough in other businesses. They are probably making a margin of 4-5p/litre,” said Mr Handley.
 
“But people in the tenant sector or those who have expanded are not in a good place.”
 
Mr Handley praised the NFU for promoting the dairy industry more in recent months, and said he hoped this push was not “ill-founded”.
 
He also said it was good to see more young entrepreneurs entering the dairy industry of late.
 
However, he called on all dairy farmers to be responsible in terms of milk production to prevent another generation from suffering.
 
“Dairy farmers need to think in terms of the people they are producing milk for and ask them what effect it will have if they boost production,” he explained.
 
“We need to talk to the producers and keep an eye on the markets. If we do this, I am optimistic everything will go the right way in 2014.”
 
Mansel Raymond, NFU dairy board chairman, said the omens were looking good for dairy farmers this year.
 
“We are part of a global industry and we will be led by global factors. The industry and dairy farmers will have to take the responsibility of taking the market indicators on.
 
“The potential is there. The demand is there. If you look at the Radobank production figures, demand in developing countries is increasing and global demand for milk is likely to increase between 2-2.5% this year.
 
“Unless there is something hidden, I don’t see any reason for milk prices to come back. In fact, the forward-thinking is that prices will also hold.”
 
He added: “The question will be: ‘Are we going to be supply driven, or market driven over the next 12 months’.
 
“At the moment, the omens look like we are going to be demand driven over the next 12 months.”
 
Source: Farmers Weekly

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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