Milk Price Cuts Wipe Out Premium for Liquid Milk Producers
The price cuts of between 5cpl and 7cpl announced by milk processors last week have effectively eliminated the liquid milk premium paid to liquid milk producers according to IFA Liquid Milk Chairman Keith O’Boyle.
“Our autumn calvers are at peak milk production in January, so milk price cuts of this magnitude have a profound impact on our profitability and effectively wipe out our premium,” he said.
Input costs for dairy farmers producing fresh milk through the winter months remain at an all-time high as there is a greater dependence on the use of concentrate feed which is costing in excess of €500/tonne at present.
“We simply cannot afford to take these kinds of hits to our profit margins. Without a liquid milk premium, the supply of daily fresh milk for supermarket shelves will become unsustainable.”
While milk processors continue to encourage spring milk producers to produce more milk early in the year by offering ‘seasonal’ or ‘early lactation’ bonuses, these are not available to liquid milk producers.
“These bonuses must be paid to liquid milk producers with immediate effect for all the milk we produce in January, February and March. Liquid milk processors cannot expect us to take cuts of seven cent per litre,” concluded Keith O’Boyle.