IFA National Dairy Committee Chairman Kevin Kiersey said statements from industry representatives and other commentators reported in the media must balance immediate market concerns with the very real, positive outlook and opportunities of growing global dairy demand. Mr Kiersey warned co-ops against flagging milk price decisions for the months ahead, and urged them to support farmers by holding their May milk price.
“IFA is totally committed to working with industry to develop solutions to help farmers manage their business through volatile times, but in the short term, co-ops, the farming press and other commentators must learn to communicate more carefully with farmers. They must avoid the boom/bust rhetoric which is so damaging to confidence and to prudent farm business planning,” he said.
“Farmers are reeling from the 3 to 4 c/l most of them have seen their milk price fall by thus far. These price cuts will severely challenge their profitability, as they will cost the average 260,000-litre producer between €1,800 and €2,500 for April and May milk alone,” Kevin Kiersey said.
“In addition to having to deal with falling milk prices, most input costs are on the rise, especially feed, fuel and energy. The bad weather has made matters worse: most farmers have had to bring cows indoors at night and the quantity and quality of 2012 first cut silage is uncertain,” he added.
“If the Irish dairy industry as a whole is to capitalise on the very real global market opportunities in the post-2015 era, farmers cannot become overwhelmed by the gloom of price cuts, when it is clear that the bright prospects of the sector remain unchanged,” he said.
“From a farmers’ point of view, the challenge is to manage to sustain viable incomes and cash flow through volatility, and I believe our industry must work with farmers to come up with innovative solutions to this problem to secure the future of the industry,” he said.
“Glanbia’s and Connacht Gold’s initiatives on fixed priced contracts are one element of such innovative approaches. I believe much more can be done on longer-term income equalisation, and other schemes allowing farmers on a voluntary basis to put away money in good times tax efficiently, which they can bring back into play when profitability is challenged,” he concluded.