Cut in skim milk powder price serious challenge to industry
The marketplace omens for the year were not looking good, and the €50 per tonne powder price cut confirmed IFA President Padraig Walshe’s warning of the most serious challenge in 30 years for the Irish dairy industry.
He says there is nothing left to cut on farms, and suppliers will not continue milking cows for little more than the minimum wage.
He also confirmed that the average dairy processing employee now earns up to 50% more than the average dairy farmer supplying the raw material. It’s a striking comparison for dairy farmers, that a job in milk processing centre is substantially more rewarding than milking cows and supplying the raw material.
The average co-op milk supplier, usually a part owner and controller of the company, as a shareholder, receives about two-thirds of the wage of the company’s average employee.
If world dairy product markets decline further, as predicted, dairy farmers will insist that any further reductions in returns from the market place must be made good by reducing processing costs, instead of passing the reduction back to milk producers.
That stems from farmers’ belief that their industry can still be highly competitive on the world scene and can deliver stronger, viable milk prices, by rooting out every inefficiency and duplication, and by co-operating more on marketing.
