Dáil Éireann Debate, Wednesday - 1 July 2015
37. Deputy Martin Ferris asked the Minister for Agriculture, Food and the Marine if he is aware that prices being paid by processors to milk producers are becoming a cause of concern for the prospects of the dairy sector; and if he will make a statement on the matter. [26066/15]
View answerThe price of milk and dairy produce is a function of the market at national, EU and international level. It is not something that the Minister for Agriculture can directly influence. I am of course monitoring market developments closely and liaising on a regular basis with farm organisations, other EU Member States and the processing sector.
After two years of very strong prices, markets have taken an unwelcome downward turn in recent times. The average farm gate milk price including VAT currently stands in the region of 30-31 cents per litre, significantly lower than the same period last year. The price situation in Ireland is broadly replicated in other EU MS, reflecting the global nature of this problem. Using cross country comparable data from the EU Milk Market Observatory the most recently available complete data shows that the milk price in Ireland is approximately 22% below the same month in 2014, slightly above the 18% decrease on average across the EU.
Strong production in milk producing countries, high levels of stocks, including in China and the Russian ban which has recently been extended have all had an impact. However, while there has been a succession of negative results from the Global Dairy Trade auction, the trend has not been wholly negative, with the most recent auction showing positive results for butter, buttermilk powder, cheddar and casein.
Overall, I remain confident about the medium to longer term prospects for the sector, with growing global demand expected to support prices in the years ahead. It is clear, however, that there will be continuing volatility, both upward and downward, around this positive trend.
My focus now is ensuring that the correct balance of policies and supports are in place so that the Irish dairy sector can overcome the effects of volatility over the next while. For my part:
- I will continue to push hard at EU level for deployment and extension of EU market supports where appropriate. Intervention and APS are at present available for butter and SMP;
- I have also introduced a number of agri-taxation measures in last year’s budget, including extending the income averaging to five years, and this will be of great assistance to dairy farmers wishing to manage volatility;
- I recently introduced a scheme to facilitate the repayment of the superlevy bill by farmers over three years which I expect will be heavily subscribed;
- I have introduced a number of schemes under the RDP which will assist dairy farmers in years to come including a new €50m investment just this week for capital investments on farm;
- I am continuing to press Irish banks to ensure that access to credit for our dairy sector is available, competitive but also responsive to market volatility.
I would strongly encourage suppliers and processors to examine their own relationships to determine whether a greater proportion of milk can by put into fixed price contracts.
I believe that a combination of these measures allied to the investment and expertise of our dairy farmers and processors means that the Irish dairy sector remains well placed to realise its potential in the years to come and to meet the challenges of market volatility along the way.
