Processors Have to Share Pain During Dairy Market Downturn – IFA

IFA Dairy Chair Martin McElearney stressed the need for milk processors to work with dairy farmers in sharing the financial cost of the current downturn in milk prices.

“In the space of three months, dairy processors have undertaken savage milk price cuts, with as much as 10 cent a litre taken off the base milk price. Farmers feel completely exposed to these cuts and are rightly asking why they seem to always the first to pay the price when markets decline,” Martin McElearney outlined.  

Since September, the price dairy farmers received has fallen sharply by over 20%, while overall cost of production remains unchanged.  

“Many farmers are rightly asking could processors have done more to lock in product earlier in the year when the market returns were higher. This would have insulated milk producers to some extent from the swingeing cuts now being imposed.”

“This type of price volatility is knocking dairy farmers’ confidence which is already fragile given the ongoing uncertainties surrounding the Nitrates derogation,” the IFA Dairy Chair concluded.