DAIRY farmers enjoyed a pre-recession bash at the World Holstein Friesian Federation Conference and Show in Killarney and Millstreet at the weekend. The conference culminated with the Irish Examiner Supreme Championship on Saturday evening — keenly anticipated as a shop window for Irish dairy genetics, and was attended by 350 delegates.
Championship winners Mervyn and Philip Jones, who farm at Gorey, Co Wexford, were the toast of a huge attendance, including breeders who attended from 40 countries, and from all over Ireland.
At a cattle sale on Friday night breeders from France and Britain were among those who paid €159,000 for 27 Irish animals on the worst day for global stock market panic since 1987.
But the big payoff is likely to follow in the form of overseas orders for Irish embryos — the preferred option for modern dairy cattle breeders trading high priced genetics around the world.
Mervyn Jones confirmed he has strong international enquiries for embryos from his champion, Croagh Fran 26.
When dairy markets are strong, buyers of dairy genetics can achieve 20-fold returns on investment within two years by using embryo techniques.
However, after the weekend high for breeders at Killarney and Millstreet, it looks like a time for dairy industries globally to batten down the hatches.
Twelve months previously at Millstreet, farming leaders celebrated boom times and said they expected strong milk prices for at least three years. However, they now predict reduced spring milk prices, making thousands of suppliers economically unviable.
But at least one farmer is expecting a quick recovery. He paid €10,200 for Desmond Dundee Embrace ET, a one-month-old calf offered at Friday night’s Cream of Ireland Elite Sale by Martin O’Sullivan, Ardagh, Co Limerick. A week earlier the calf’s mother was one of the champions of the World Dairy Expo in Wisconsin where US breeders paid up to $97,000 for top Holstein Friesians.
Showing posts with label market.. Show all posts
Showing posts with label market.. Show all posts
Tuesday, October 14, 2008
Friday, September 12, 2008
Dairy market gloom
Lakeland Dairies yesterday (Wednesday) cut their August milk price by 2 cent per litre and there are fears that other processors are set to follow the same downward trend. The move follows last Friday's €100 per tonne cuts in the Irish Dairy Board (IDB) butter and skim prices.
Meanwhile, it was confirmed this week that profits for 2008 at the IDB will be sharply down on previous years and the traditional bonus payment to processors is now in serious doubt.
The IDB paid a bonus of €6m to milk processors for 2007, while the 2006 bonus was €11m. Conor Ryan, chief executive of Arrabawn co-op, said he would continue to push the case for a bonus payment from the IDB as it was an important contribution for co-ops trading heavily with the board.
Arrabawn are due to set their August price today.
IDB chief executive Noel Coakley warned that a combination of poorer market returns, higher financing costs and exchange rates will have 'a serious impact' on the IDB's performance in the current year.
Furthermore, consumer reaction to 2007's higher prices has adversely affected returns, with sales of Kerrygold butter in the crucial German market down 12% on previous year levels. This has traditionally been one of the IDB's main profit centres.
Noel Coakley explained that the IDB's financial performance was severely affected in the first half by the carry-over of expensive product purchased in 2007. This was sold into depressed markets at a substantial loss.
The IDB has now changed its procurement policy to avoid a repeat occurrence.
The timing of the announcement will inevitably be seen as preparing farmers for a milk price cut.
However, Coakley said: "it is important that all dairy industry participants are aware of the market realities''. He added: "Market conditions across all products have weakened considerably from the extraordinary heights of 2007.''
From their 2007 peak, he said that official quoted price for butter is down 39%; skim milk powder 45% and whole milk powder 35%.
Irish dairy farmers can only hope that the recent strengthening of the dollar and slowdown in US production growth may help our position.
Meanwhile, it was confirmed this week that profits for 2008 at the IDB will be sharply down on previous years and the traditional bonus payment to processors is now in serious doubt.
The IDB paid a bonus of €6m to milk processors for 2007, while the 2006 bonus was €11m. Conor Ryan, chief executive of Arrabawn co-op, said he would continue to push the case for a bonus payment from the IDB as it was an important contribution for co-ops trading heavily with the board.
Arrabawn are due to set their August price today.
IDB chief executive Noel Coakley warned that a combination of poorer market returns, higher financing costs and exchange rates will have 'a serious impact' on the IDB's performance in the current year.
Furthermore, consumer reaction to 2007's higher prices has adversely affected returns, with sales of Kerrygold butter in the crucial German market down 12% on previous year levels. This has traditionally been one of the IDB's main profit centres.
Noel Coakley explained that the IDB's financial performance was severely affected in the first half by the carry-over of expensive product purchased in 2007. This was sold into depressed markets at a substantial loss.
The IDB has now changed its procurement policy to avoid a repeat occurrence.
The timing of the announcement will inevitably be seen as preparing farmers for a milk price cut.
However, Coakley said: "it is important that all dairy industry participants are aware of the market realities''. He added: "Market conditions across all products have weakened considerably from the extraordinary heights of 2007.''
From their 2007 peak, he said that official quoted price for butter is down 39%; skim milk powder 45% and whole milk powder 35%.
Irish dairy farmers can only hope that the recent strengthening of the dollar and slowdown in US production growth may help our position.
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