Specialist liquid milk producers being priced out of market

Supermarkets and other retailers will find it difficult to source locally produced fresh milk in the winter months, as low prices are driving away specialist liquid milk producers.

IFA national liquid milk committee chairman, Teddy Cashman, said farmers markedly reduced the late 2015 dairy calving that would normally have been geared towards underpinning liquid milk supply.

With returns from the retail sector waning, an increasing number of dairy farmers are switching their focus onto cheese and other commercial markets.

“In the prime autumn calving season, from September to December 2015, ICBF reported almost 14,000 fewer dairy calf births — a 15% fall in comparison with the same period last year, in the context of an 8.5% increase in calf births for the whole year,” said Mr Cashman.

“This clearly indicates farmers are doing what we predicted last year: matching their calving pattern more closely to their liquid milk contracts to minimise losses, or even reducing or ceasing their commitment to liquid milk altogether.

“We had also correctly predicted low base milk prices were boosted during the autumn by relatively strong constituents, but that, even with an unchanged price, constituents would all but collapse during December and January, cutting at least 6c for every litre produced, at the most expensive time of year to produce milk.”

The IFA has previously led campaigns seeking an extra 8c per litre from retailers to cover the extra costs that come with producing milk for sale in Irish outlets over the winter months. However, southern dairy farmers are now voting with their feet.

The National Milk Agency (NMA), the statutory regulatory body for the supply of milk for processing for liquid consumption in the State, says milk imports are rising. Around one in four litres of fresh milk consumed in the State is now imported, much of it from Northern Ireland.

Teddy Cashman has again outlined his concerns for the autonomy of Irish liquid in his latest meeting with NMA chairman Denis Murphy and CEO Muiris Ó Céidigh.

And, following the signing into law of new retail regulations, he said retailers, dairies, regulators, government, and consumers should not take local fresh liquid milk for granted post-quota.

He urged dairy stakeholders to take on board the need for fit-for-purpose payment structures and levels that allow farmers to cover costs and pay themselves a reasonable wage.

“I believe we are seeing for the first time farmers under increased pressure to either reduce or cease their commitment to liquid milk, or to adapt more closely their calving pattern to their contracts,” said Mr Cashman.

“While the latter is an economically wise option for farmers who wish to remain in liquid milk, reduced calving in autumn creates a situation where dairies will have much tighter availability of fresh, high quality milk for consumers to drink during the winter.”


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