Urgent Government Action on Dairy Farm Cash Flow Support Needed – O’leary
Speaking at the IFA’s second regional Dairy Farm Income meeting in Carrick on Shannon last night (Monday), IFA National Dairy Chairman Sean O’Leary said the Minister for Agriculture Michael Creed must show far greater urgency in matching funding and utilising the €11.1m EU aid package and the state aid concessions to support dairy farmers’ very badly stressed cash flows.
Sean O’Leary warned against complacency, saying while milk prices have started recovering, they have a long way to go to make up for a prior 27 month slump, which has taken a severe toll on farmers’ margins, which in 2016 have fallen deep into negative territory. He said co-ops must pass back every last cent that markets allow as soon as they allow, and Government must urgently utilise the tools at its disposal to support dairy farmers’ cash flow.
“Dairy markets are rallying strongly, and this is welcome and badly needed after 27 months of uninterrupted milk price falls. However, farmers have received only between 1.5 and 2.5c/l more for their milk in the last two months, which still leaves them well below their production costs,” he said.
“While dairy farm incomes turned out better than feared in 2015, this was down to higher volumes and lower feed costs due to good production conditions in that year. When you analyse the margins, however, you realise that farmers were not able to remunerate their own labour for most of 2015,” he said.
“2016 was worse again for farmers, because prices fell well below the costs of production from spring, and accumulated bills have been weighing heavily on their cash flow throughout the year. Many of those bills – merchant credit, superlevy, utility, tax – are coming due now – so action from the Minister is urgent,” he concluded.
IFA Dairy Chairman Sean O’Leary today participated in the IFA pre-budget lobbying of Oireachtas members, which sought to ensure that farm taxation is amended to help farmers better cope with income volatility.
