Co-ops’ Focus Must Be on Holding Prices, Not on Conditioning Farmers

IFA National Dairy Chairman Tom Phelan has commented that farmers, at this point, need their co-ops’ spokespeople and leaders focused on holding prices and paying justified top-ups on 2017 supplies.

He added that, rather than seeking to publicly condition farmers for 2018 milk price cuts, he would like co-ops’ spokespeople to display their enthusiasm in explaining how they would support farmers when it becomes necessary.

“In these days of instant communication, dairy farmers are better informed than ever about prices and markets, and all are well aware that 2018 will prove more challenging,” Mr Phelan said.

“Meanwhile, IFA has shown that, while paying increased milk prices, co-ops have done quite well out of an exceptionally good year in 2017. It is clear that they have had ample opportunity to rebuild their balance sheets. We estimate that, based on the EU Milk Market Observatory weekly price reports for the period from July 2016 to October 2017, co-ops made over €190m in addition to the increased prices paid to farmers,” he said.

“Last week, Bord Bia pointed out in their 2017 Food and Drinks Exports report that with a 20% increase in trade – a combination of volume and returns – the dairy sector had contributed one-third of Ireland’s €12.6bn record food export performance, despite all the problems caused by Brexit.

“Farmers, on the other hand, have delivered 8% more milk this year for co-ops to trade on strong markets, and in 2017 had only the first opportunity to start improving their finances after two very challenging years. It is essential that they would be allowed to maximise the benefits of good market returns in 2017 before any downturn.

“I think farmers are entitled to expect more from their co-op leaders as we enter the calving season than warnings on 2018 milk prices. I urge all co-op board members to focus their energy this month on holding milk prices into spring, and examining their much-improved balance sheet to find ways of emulating those co-ops who have agreed bonuses for 2017 supplies,” Tom Phelan concluded.

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