Global dairy markets set to “remain strong for the foreseeable future,” according to processors

The global dairy market is set to remain strong “for the foreseeable future” due to reduced global milk supply and inflationary pressures.

t comes as some key Irish milk processors raised their milk prices by at least 2c/L in recent days, having increased their milk price last month also.

Global milk production continued to record a year-on-year deficit in March, with total milk deliveries across the key producing countries down 0.7pc since last year, according to the Agriculture and Horticulture Development Board (AHDB).

On average, global daily milk deliveries were down 5.8m litres per day from March 2021 to March 2022.

Adverse weather has severely impacted milk production in Australia, New Zealand and the US and inflation is affecting farmers, processors and food manufacturers across the board.

Ireland which had mostly been in growth over the last year, was down 2.5pc in milk production from March 2021 to March 2022 while daily deliveries in the EU-27 were down 0.5pc on last year.

Although annual growth was seen in some areas such as in Italy (+2.9pc) and Poland (+1.8pc), declines in the key nations of the Netherlands (-2.5pc), Germany (-1.4pc) and France (-1.2pc) countered this.

It comes as some of the main Irish processors recently announced an increased milk price for May milk.

Kerry Group announced an increase of 2c/L for May milk, as did Lakeland Dairies which said the global dairy markets “remain firm as tighter global supplies trail current demand trends.”

“Inflation is affecting farmers, processors and food manufacturers at every level. Market sentiment is becoming more challenged as rising costs affect all categories of goods and services and the war in Ukraine has continuing far reaching impacts. The markets will continue to provide good returns for the foreseeable future,” said a spokesperson for Lakeland.

Glanbia also announced an increase of 2c/L for May milk and said dairy markets “continue to perform at a high level, with a balance between reduced global milk supply and some inflationary pressures impacting on consumer demand in certain markets.

Dairygold recently announced an increase of 2.5c/L for May milk and said the increase “reflects the ability of the society to return a strong milk price to suppliers from continued strength in milk markets.”

A spokesperson for the processor said this strength is driven by global demand for dairy ingredients and supply constraints in major milk producing regions.

“The society recognises the significant increases in input costs to suppliers this year and will continue to maximise the value of milk returns to address this challenge.”

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