IFA Shouts Stop to Further Milk Price Cuts, Challenges Industry Model That Relies on Farmers Taking All the Price Risk

At a meeting of the IFA National Dairy Committee this week, dairy farm leaders from all over the country called for an immediate stop to any further milk price cuts, in the face of severe cash flow challenges on farms. The Committee members will contact co-op board members accordingly in the coming days, as boards prepare to make decisions on the March milk price.

Chairman Sean O’Leary said a model that relies on farmers producing ever more milk regardless of price to keep processing capacity fully utilised is unsustainable. He said co-ops had supported milk prices in 2015 and needed to continue to do so in 2016.

“Co-ops, in drawing up their five-year business plans, budget for all their operating costs, with the exception of the milk price, which is typically whatever is left over. With a new breeding season about to start, and to secure a sustainable medium and long term future for the Irish dairy sector, co-op CEOs should give strong directions to their suppliers of what volume they have realistically priced demand for. For this volume, they must ensure a farmgate price that, at a very minimum, covers production costs” Mr O’Leary said.

“The mood among farmers is getting more frustrated and militant. It is simply not good enough for co-ops to turn around and cut milk prices further. We know the market is problematic at the moment, but it is also cyclical. Already, we know demand is picking up internationally, especially in China and SE Asia, and this week’s 2.1% increase in the GDT average price will hopefully contribute to better market sentiment,” he said.

“Meanwhile, Dairy Committee members and fellow dairy farmers within their counties will in the coming days look to meet and talk with co-op board members to urge them to stand firm around the board table against further milk price cuts for March milk,” Sean O’Leary concluded.

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