Brendan Smith (Cavan-Monaghan, Fianna Fail)

Milk supplies are subject to a number of variables, including price, climatic and other factors. On the 2009 to 2010 quota year, which ended on 31 March 2010, preliminary figures from the co-ops indicate that milk deliveries were 9.82% under-quota nationally for the year as a whole.

Milk markets have been subject to extremes of volatility in recent years. From the high prices in 2007, world dairy markets returned to far lower levels in 2008, primarily due to a collapse in demand caused by the global economic downturn. That trend continued into 2009, before gradually improving later in the year. Adverse weather conditions in 2009 were also a significant factor in the supply levels in that year.

The outlook for 2010 is far more optimistic. In 2009, I continually pressed the European Commission to take all appropriate actions to deal with the dairy market situation and the implementation of a range of support measures helped to stabilise the market. The application of the full range of market support measures helped to put a floor under prices, which began to stabilise last autumn and have recovered significantly since then. They needed to recover significantly. The medium-term prospects for global dairy markets are also good. Growth in wealth and population is forecast to stimulate strong levels of demand for dairy products and returns should improve to all parts of the sector.

While the very cold first quarter of 2010 was not conducive to grass growth, temperatures have increased recently and the price outlook is far more positive than at this time last year. Returns on milk deliveries are supplied to the Department on a monthly basis by milk processors. The figures in respect of April 2010 will not be compiled until mid-May. At this point, therefore, I am not in a position to comment on milk supplies for the first two weeks of the quota year.

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