“Probably, in 2016, prices will remain low. We don’t expect a rebound before the end of the year and will take the whole of 2017 to have a full rebound of the market,” the Dutch banker and former dairy farmer said on Monday.

He was addressing the Nuffield contemporary scholar conference that takes place in Ireland for the first time this week.

The situation we are in is really temporary, but we have to survive it

“At least we know the demand will grow by 2% every year. The situation we are in is really temporary, but we have to survive it,” IJntema said. In line with other analysts, he attributed the current price slump to production rises in major producing regions on the back of high prices in recent years, followed by the accumulation of high stocks in China at the same time as the Russian ban.

In the long term, IJntema expects supply and demand to rebalance as the capacity for cheap expansion is exhausted. “Even in the low-cost price regions like New Zealand and here in Ireland, if farmers want to increase their production, I don’t believe they can do it at the same low-cost price,” he said.

“In the end, I really believe that the milk price will tend towards the average cost price, or maybe the best 25%,” he added, warning: “There is only room in the market for the best in class.”

Read more from Bart IJntema and other speakers at the Nuffield conference through the week at www.farmersjournal.ie and in the Irish Farmers Journal.

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