Dairy markets are hard to read currently, but the downward trend should slow down or stop in the second half of 2023, Dairygold CEO Conor Galvin told the Irish Farmers Journal this week.

“What we’re seeing right now in terms of volumes is a very thin market, which makes it hard to read.

“But particularly now when there is an imbalance between supply and demand meaning buyers at the moment are willing to step back and wait for prices to drop further,” he said.

Galvin highlighted that the forecasts that come through in terms of futures pricing suggest the momentum that has existed since the turn of the year is likely to continue.

However, he said, “looking forward to the second half [of 2023] there are reasons to believe that the trend we are currently seeing will slow down or stop. There are reasons to be optimistic if that imbalance between supply and demand are corrected”.

On global dairy markets, Galvin said the continued low demand from China remains a major dairy headwind.

He highlighted that the Global Dairy Trade (GDT) Index has been falling throughout 2023 and dropped below 1,000 in the latest data, the first time it has fallen below that level since late 2020.

On the whole, as Galvin said, the best cure for high prices is high prices. Demand is soft right now, and supply needs to react to that.

On Irish milk supplies, Galvin added that “the years of significant growth are behind us,” adding that any future increases would be much more gradual and driven by incremental moves steered by increases in efficiency or genetics, rather than an increase in herd size.