One in four litres of milk consumed in Ireland are imported from abroad

IMPORTS now represent one in every four litres of fresh milk being consumed in the state.

Oddly enough, though, Irish dairy farmers will not be too put off by this top-line statistic in the annual report issued yesterday by the National Milk Agency (NMA), the State’s liquid milk consumption regulatory body.

Most Irish dairy farmers are basing their expansion ambitions on the export of cheese, WMP and other dairy products. Nonetheless, the NMA’s overview of 2010 makes for sobering reading.

In 2010, the annual average producer price for manufacturing milk supplies increased by 30% or 6.75c/litre to 29.24c/litre, excluding VAT. The annual average producer price for milk for processing for liquid consumption rose by 11% or 3.27c/litre to 32.44c/litre.

Producer prices for milk supplies for liquid consumption under the Manufacturing Milk Price plus Bonus systems rose automatically with the increase in manufacturing milk prices, while prices under the Flat Price system lagged the increase in manufacturing milk prices.

The confidence of registered milk producers was shaken by the decrease of over 50% in the annual average price differential for all year round milk supplies over manufacturing prices from a high of 6.68c/litre in 2009 to 3.20c/litre in 2010.

The decrease in the price differential for all year round milk supplies occurred at a time when registered milk producers were experiencing substantially higher costs.

NMA chairman Denis Murphy said: “Registered milk producers, who are a significant producer grouping in the domestic milk supply sector, representing 11% of all milk producers and supplying 16% of domestic milk supplies, are disheartened by the growing market domina- nce of the retail multiples and by their impact on the fresh milk supply chain.

“In July, the agency again recommended to the Department of Enterprise, Trade and Innovation that a statutory Code of Practice for Grocery Goods undertakings was necessary in respect of supply agreements for fresh, perishable products so that value is maintained in the business chain for producers and processors.”