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Milk price crisis prompts dairy conference

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By Jim Cornall+

18-Apr-2016
Last updated on 18-Apr-2016 at 17:03 GMT2016-04-18T17:03:42Z

Lagan Valley Island in Lisburn, Northern Ireland, will be the venue for 'managing Dairy Volatility,' a day-long conference that will look at low milk prices and market volatility. Photo: iStock - Robert Mayne
Lagan Valley Island in Lisburn, Northern Ireland, will be the venue for 'managing Dairy Volatility,' a day-long conference that will look at low milk prices and market volatility. Photo: iStock - Robert Mayne

In response to current low milk prices, a conference has been arranged for next month to address international responses to low milk market prices and market volatility. 

“Managing Dairy Volatility,” which is being organized by the Ulster Farmers Union (UFU) and Dairy UK (NI), will take place in the Lagan Valley Island venue in Lisburn, Northern Ireland, on Thursday, May 5, from 9 a.m. to 3.30 p.m. 

The event will be chaired by Kevin Bellamy, Global Dairy Strategist from Rabobank.

The conference will bring together a panel of international experts to explore the role of government policy in helping dairy businesses deal with volatility and manage margins.

It will compare policy approaches in the EU and US, and look at how dairy farming and dairy processing businesses are being managed in the current environment.

Action needed now

Speaking at the launch, UFU president, Ian Marshall, and Dairy UK (NI) chairman, Paul Vernon, said there were no quick-fix solutions to the current crisis in the industry. 

The international speakers are:
  • Jim Mulhern, CEO National Milk Producers Federation (NMPF)
  • Peter Blogg (Chicago Mercantile Exchange)
  • David Dobbin (CEO United Dairy Farmers)
  • Steen Nørgaard Madsen (Danish Dairy Board/ARLA)
  • Robbie Turner (Rice International)
  • Peter Lee (European Investment Bank)
  • Jay Waldvogel (Dairy Farmers of America)

“That cannot however be an excuse to do nothing.  We are working with the banks and others on the short term cash flow crisis – but we have to go beyond this to creating an industry with a stable long term future, and central to that are new ways to reduce price volatility for farmers,” Marshall said.

Vernon said, “If we fail to find new ways to tackle this we are accepting that we will continue to live with uncertainty. That cannot be a foundation for an industry that wants to grow to take advantage of the opportunities that will return to dairy markets. 

“Getting out of one crisis and waiting for the next one is the alternative to radical thinking on volatility and margin management.”

Price drops in Germany

The conference comes as the European Milk Board (EMB) issued a statement saying that German milk production figures calculated quarterly by BAL (Büro für Agrarsoziologie und Landwirtschaft, Office for Agriculture and Agricultural Sociology) show pressure on dairy farmers in January 2016.

The EMB said that in Germany, it cost €0.45 ($0.51) to produce one kilogram of milk in January, while the average farm-gate price was €0.29 ($0.32) per kilogram.

The German prices for March have since dropped even further, and are now between €0.21 ($0.24) and €0.29 ($0.33).

In Denmark, farmers are being paid €0.27 ($0.31), and in Belgium the price is between €0.22 ($0.25) and €0.23 ($0.26) a kilo of milk.

EU policy blamed

Romuald Schaber, EMB president, said, “Although the EU policy-makers decided on measures in March, they are neither binding for every member state nor do they affect every milk producer. If they were, they might have an effect.”

He added that strong production countries like Germany and Ireland have already announced that they will not be applying this measure.

“So it is to be expected that reductions in production in some countries will be offset by increases in others. This is hardly what you would call solidarity and shared market responsibility,” he added.

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Posted by Nancy Mori
21 April 2016 | 09h062016-04-21T09:06:50Z

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