Farmers urge Dairygold to reverse ‘uneconomic’ milk price cuts

A CRISIS meeting between dairy farmers and Dairygold took place last night where farmers pleaded with the dairy giant to reverse milk price cuts which made dairying uneconomic.

Following Dairygold’s decision last week to cut their February milk price by 2c/l, and their March milk price by a further 2c/l, IFA (Irish Farmers Association) National Dairy Committee chairman Richard Kennedy said he and the relevant members of the National Dairy Committee would be meeting with the full board of directors of Dairygold Co-op this week.

At the Reox AGM earlier this week, IFA distributed leaflets questioning the Dairygold and Reox directors as to the Dairygold milk price move.

Mr Kennedy said milk suppliers were angry at the price cut because it was premature and because Dairygold were not sharing the pain they were imposing on farmers. He said Dairygold must revisit the 2c/l March price cut.

“Why have Dairygold directors cut milk prices before presenting to shareholders a comprehensive cost-cutting programme, including milk collection, testing, processing, administration, directors’ fees, wages and cost-sharing projects with other societies?” he added.

“The cut implemented prematurely by Dairygold for March milk is an unacceptable blow to their suppliers: hadn’t Dairygold invested in R&D (Research and Development) and diversification to secure a better milk price than commodity-dependent co-ops?” he asked.

“Dairygold suppliers have had their milk price cut by a massive 17.4c/l in the last 12 months. The value of March ‘09 milk will be down 47% over March ‘08, and unless prices improve, average milk receipts for the year 2009 will be cut by e29,000 down to e50,000,” he said.

“To cover bare costs and own-labour, the most efficient producers in Teagasc’s Dairy Profit Monitor will need between 26c and 29c/l in 2009.

“At 20c/l, the majority of Dairygold suppliers will not cover costs, nor earn any income from which to finance day-to-day living expenses, loan repayments or investment,” Mr Kennedy added.

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