Bernard Durkan (Kildare North, Fine Gael)
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Question 198: To ask the Minister for Agriculture, Fisheries and Food if he has compared prices paid to the producer in the dairy sector here to those prevailing in other EU member states in each of the past three years; his plans to address any issues arising; and if he will make a statement on the matter. [12184/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Dairy farmers' incomes comprise the market price paid for milk and direct income support from the EU. The Single Farm Payment for dairy producers includes a dairy premium of 3.6c per litre. Market forces have a major influence on the price paid to farmers for milk. World market prices determine the returns received by dairy processors and these in turn are reflected in the price paid to farmers. In essence, farm gate prices normally reflect the returns from international markets of dairy product sales.

Ireland's peripheral geographic location and highly seasonal grass based production curve has resulted in a dairy production profile heavily based on storable product. Those commodity products, such as butter and milk powders, are low margin products and this is reflected in the milk price. Milk prices vary across the EU member states and Ireland is generally close to the average EU price. The following table shows the average milk prices for Ireland and the EU over the past seven years.

Prices increased at the end of 2009, and by December the Irish milk price was €27.50/100kg, close to the EU average of €28.30. The Irish price in January 2010 was €27.08/100kg, and is the latest official price. The EU average price for January is not yet available.