The Irish Farmers’ Association (IFA) has expressed concerns over the potential impact of further milk price cuts this month on dairy farmers. The last two months have seen significant cuts to the base price for milk offered by all processors. Stephen Arthur, the IFA National Dairy Committee chairperson, has warned that dairy farmers cannot sustain any more cuts to the milk price. He added that farmers have already endured milk price cuts in excess of 10c/L since January, which equate to an income reduction of €50,000 for the average supplier. Arthur also drew attention to the recent spell of wet weather the country has experienced, which has resulted in cows being housed throughout the country and big drops in milk supplies.
“Met Éireann has reported that this past March was the wettest March on record, while the start of April has seen absolutely no let-up,” the IFA dairy chair said. “All this means that the overall cost of production has soared for 2023. Many processors will remove early calving bonuses in March so farmers will endure a cut in income before any changes to the base price are made,” Arthur added. “We know a lot of boards will be deciding milk prices this week. Board members must listen to the concerns of their suppliers and sustain milk prices at current levels.”
Arthur’s remarks echo similar concerns that were expressed by the Irish Creamery Milk Suppliers’ Association (ICMSA) last week. ICMSA dairy chairperson Noel Murphy said that margins for dairy farmers will be “completely wiped out” if there is a further round of cuts for March milk. The ICMSA is calling for base milk prices to be held at their current levels throughout this year. Murphy said that co-ops have implemented “massive cuts to farmgate prices” in the first two months of the year. “There is no doubt that prices had to come back, but it is now approaching a level where costs of production are coming close to and, in many cases, exceeding the base price,” Murphy said.
The IFA has also raised concerns over the lack of progress on the review of the Milk Supply Chain Forum. The Forum was established in 2016 to address issues in the milk supply chain, including price volatility, and to provide a platform for dialogue between farmers, processors, and retailers. The IFA has called for the review to be concluded as soon as possible and for the Forum to be given a stronger mandate to address the challenges faced by dairy farmers.
The Irish dairy sector has been hit hard by the COVID-19 pandemic, with the closure of food service outlets and a reduction in demand for dairy products leading to a drop in prices. The sector has also been impacted by Brexit, with the UK being a significant market for Irish dairy exports. The UK’s exit from the EU has led to uncertainty over future trade arrangements and increased competition from UK producers.
Despite these challenges, the Irish dairy sector has continued to perform strongly. According to the Central Statistics Office, the value of Irish dairy exports increased by 2% to €4.42bn in 2020, with the volume of exports increasing by 5%. The sector has also benefited from the growth in demand for dairy products in Asia and Africa.
The Irish government has recognised the importance of the dairy sector to the Irish economy and has provided support to farmers through a range of measures, including the COVID-19 support scheme for dairy farmers and the Brexit Adjustment Reserve. The government has also committed to the development of a new agri-food strategy to support the growth of the sector.
In conclusion, the Irish dairy sector is facing significant challenges, including price volatility, uncertainty over future trade arrangements, and increased competition. The IFA and ICMSA have called for base milk prices to be held at their current levels throughout this year to support dairy farmers. The government has recognised the importance of the sector to the Irish economy and has provided support to farmers through a range of measures. The review of the Milk Supply Chain Forum must be concluded as soon as possible to provide a platform for dialogue between farmers, processors, and retailers and to address the challenges faced by the sector.