Tom Fleming (Kerry South, Independent)
Link to this: Individually | In context

Question 533: To ask the Minister for Agriculture, Food and the Marine his plans to improve milk prices for suppliers in 2012 in view of the fact that prices paid in 2011 were close to the bottom of the EU milk price league; and if he will make a statement on the matter. [5053/12]

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

The milk price paid to dairy suppliers is a commercial matter between the dairy farmer and his/her processor. Market forces have a major influence on the price paid to farmers for milk, as world market prices for dairy products determine the returns received by dairy processors and these are reflected in the price paid to farmers. It is encouraging to see that 2011 was a very successful year for the dairy industry, with exports of Irish dairy products and ingredients valued at some €2.66 billion, an increase of 17% over 2010 . The CSO's recent advance estimate of output, input and income in agriculture for 2011 showed output value in the milk sector up €304 million, or 20%, compared to 2010. The effect of this performance can be seen in the milk price paid to Irish producers, and according to official CSO data, the average milk price paid to Irish producers in 2011 was 34 cent per litre, well above the 2010 average of 30 cent per litre .

Producer milk prices vary widely across the EU but, as the structure of the dairy industry differs greatly between member states, it can be misleading to simply compare prices. Nevertheless, Ireland is generally close to the average EU price and in the most recent EU data for November 2011, Ireland's milk price was €38/100kg compared to the EU average of €35.2/100kg.

Dairy markets remain relatively stable at the start of 2012, and the short term outlook is quite positive. There will always be short term fluctuations in dairy prices, and my Department provides €6 million per annum through its Dairy Efficiency Scheme to encourage the adoption of technology and best practice at farm level to equip farmers with the knowledge and skills necessary to maximise their output, reduce their costs of production and increase margins. It is important, however, to remember that the medium term prospects for global dairy markets are good. Growth in global population and wealth is forecast to stimulate strong levels of demand for dairy products.