Dairy Conference Examines Issue of Volatile Prices
The volatility of milk prices and incomes in the dairy sector was the subject of a conference which took place at Cork Institute of Technology today, Monday 3 September. The event was organised by CIT in conjunction with Teagasc and the Irish Cooperative Organisations Society.
The main theme of the event was how to counteract the uncertainty that surrounds pricing and profitability in the dairy sector in Ireland, particularly with the removal of the EU milk quota drawing nearer. The growing interest in this area was reflected in the participation of dairy processors from all over Ireland.
Speakers included Irish and US academics and financial experts and the keynote address was provided by Professor Andrew Novakovic of Cornell University, who described how the US dairy industry deals with the problem of volatility in dairy prices and farm incomes.
Other speakers examined the particular difficulties which the dairy sector in Ireland faces in providing more stable dairy prices, the importance of the Single Farm Payment in acting as an income stabiliser on dairy farms and the financial tools that are now becoming available in Europe to deal with price risk in the dairy sector.
A roundtable of dairy industry stakeholders also formed part of the event, which it is hoped will provide a pathway towards further industry level discussions in this topic area. Teagasc economist Trevor Donnellan, said: "The volatility issue is difficult enough to manage now, but after 2015 farmers will really need to create a more secure environment. This is where the financial instruments come in.
These financial companies are the ones who will take the burden of the risk, and they have to be paid for that service. This is a new problem for the dairy sector, and it needs a new mind-set to address it”.