The Irish Dairy Board (IDB) says that its Purchase Price Index has hit a record high of 114.5 for March, reflecting firmer international dairy markets due to recent weather shocks in the Southern Hemisphere and Europe.
Internationally, IDB notes that Fonterra’s Global Dairy Trade auction has spiked to unprecedented levels on restricted volumes, owing to a drought-constrained New Zealand milk supply, and generally depressed output in most of the main milk producing regions worldwide.
Commenting on the current market price spike, Fergal McGarry, Global Director, IDB welcomed the higher spot commodity prices while emphasising the importance of maintaining the Group’s longer-term strategy of adding value to Irish milk; moving more product out of commodity into branded and added-value ingredient products, “Farmers are focused on their expansion plans post 2015 and the IDB also has to be strategic with its route to market development programme,” he said.
McGarry explained how the IDB is focusing its activities and investment in developing new, high-value markets for the post-quota era.
“It is critical that we continue to invest in brand innovation, in-market sales teams and long-term customer relationships, while maximising returns through necessary price increases,” he said. “Investment in branding generates customer loyalty for our products and a premium return. Innovations in products keep our consumers interested in what we sell, and ensure that our ingredients customers get product tailored to their needs, from a source they trust.”
“By maintaining a long-term focus, Ireland has a milk price which compares favourably with our key global competitors, despite Ireland’s seasonal output profile and island location. During periods when commodity markets are at their most volatile, the IDB does not return short-term spot-market spikes, but will shelter returns to its members from the extreme lows that tend to follow such spikes.”
“A sustainable, high return is what we seek to deliver for our members,” McGarry ended.
