Speaking at the Virginia Show today, IFA President Tim Cullinan said banks will have to step up and support dairy farmers in the face of mounting financial pressures.
Global dairy markets remain challenged, mainly due to ample global supply of dairy product and particularly sluggish demand, particularly in China. While initial market assessments suggested a recovery in the final quarter of 2023, it is doubtful that markets will recover before year end.
With this in mind, the IFA Dairy Committee held a meeting to discuss options to address the challenges due to likely cashflow shortfalls as a result of sharp falls in the milk price.
IFA National Dairy Chair Stephen Arthur said “Farmers are really worried, particularly as they face potentially very large tax bills this Autumn and we need to assist them. The milk price is falling rapidly, while our input costs are going the other way and that’s going to lead to significant financial pressure”.
“We decided to hold an urgent meeting of our committee to discuss ways to alleviate the pressures on our members. We will be engaging with banks and other credit providers in the short-term as a starting point to ensure farmers are properly supported financially over the coming months,” he said.
The IFA National Dairy Chair also emphasised that market returns have to be maximised to dairy farmers, while any reductions in input costs needs to be immediately passed on.
“It’s absolutely vital that dairy processors return every single euro they possibly can to dairy farmers through the milk cheque. These processors also supply the bulk of dairy farmers inputs; we have to see input prices move downwards in the coming months too,” Stephen Arthur added.
At the meeting, IFA National Liquid Milk Chair Keith O’Boyle said that liquid milk producers were particularly exposed to the challenging market as they commence calving their autumn herd.
“Spiralling meal bills and dismal premiums for liquid milk production have left us in a very vulnerable place. We need double the premium we’re getting in order to survive. The processors are well aware of this and they need to deliver on it in order to sustain the sector,” he said.