Tension marrs Irish dairy sales rise

By Chris Mercer

- Last updated on GMT

Related tags: Idb, Irish dairy, Milk

Rising commodity prices in the second half of 2006 helped the Irish
Dairy Board to a five per cent sales rise for the year, but
producers warn they are not reaping the benefits.

Stronger commodity prices and a good performance from the Kerrygold brand helped the Irish Dairy Board (IDB) to reach €2bn in sales last year. But its announcement came as a supplier organisation claimed dairy farmers were still making a loss, revealing tension between producers and processors similar to that in the UK. "It is clear that market returns for both commodity butter and powders are currently very strong with prices for other dairy products, including casein and cheese, lagging behind,"​ said IDB chairman Michael Cronin, commenting on its results. Dairy commodity prices recently hit record highs thanks to a tighter supply and demand situation, which has partly emerged from droughts in Australia blighting production there. IDB also benefited from Kerrygold branded sales, which rose 5.7 per cent in 2006 and becoming the top imported butter to the US. The success meant IDB has been able to reduce its debt by six per cent during the year, and also increase revenue reserves. Not everybody in the Irish dairy sector could say the same, however, according to the Irish Creamery Milk Suppliers Association. It said that having factored in the IDB rise, it was "now confident thatan average dairy farmer (50,000 gallons) was now losing approximately €2,200 on their April milk due to the Co-ops seeming reluctance to pass back the benefits of the immeasurably stronger market".​ President Jackie Cahill said the IDB had increased prices paid to co-operatives by 9.5 cents per litre since last July, but farmers had only seen an extra 1.5 cents per litre. IDB's Cronin said he expected producers to get more soon. "The strong dairy markets should, to the extent that butter / powders are represented in the product mix, provide a welcome increase in the prices received by dairy farmers, at least in the short term."

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