The fall in dairy product prices being seen around the globe is not likely to correct itself until the end of next year, Collins, managing director of Ornua’s dairy trading and ingredients division, said in a presentation to the Joint Oireachtas Commitee on Agriculture.

He was basing his forecast on the current state of the world dairy market and the views of previous commentators such as Rabobank analysts

Collins said the only way in which an earlier correction in prices could take place was if a substantial weather event were to occur. He said such an event, for example El Niño, would have to hit key milk-producing regions such as New Zealand to have a "corrective effect on the current imbalance between supply and demand."

European production growing

Milk production in Europe has grown substantially since the removal of quotas in April 2015. Ireland has grown at the fastest rate with milk deliveries to Irish processors from January to July 2015 up 8.6% compared with the same period last year. Deliveries from April to July this year, during which peak production occurs in Ireland, are over 12% ahead of the same period in 2014.

Meanwhile, Dutch milk deliveries from April to July are 7% ahead of last year, while German deliveries are 2.4% ahead.

Collins reiterated the previously oft-quoted analysis that increased global milk production, the Russian ban and the slump in China’s demand for dairy products are the main factors affecting price for dairy farmers at the moment.

However, he gave some hope by suggesting that China would eventually follow the pattern of other big dairy importers by moving from importing just powder to also importing butter and cheeses.