Dairies urged to back call for better liquid milk price from retailers
Mr Cashman cited National Milk Agency figures showing that 32% of liquid milk producers have exited the specialist sector in the past 10 years.
The newly published 2012 agency annual report shows that since 1995, the farmer’s share of the retail price has fallen from 43% to 32%.
“A lot of producers are getting out of specialist liquid milk production because spring milk costs are lower and margins better in good years,” said Mr Cashman.
“After the nightmare of skyrocketing feed costs and the fodder crisis last winter and spring, the fact that manufacturing milk prices have risen strongly in the last few months is the only thing that is keeping liquid milk producers’ heads above water. It is not good enough: manufacturing milk prices are volatile, and when they eventually weaken in response to global dairy markets, liquid milk producers will be left high and dry.”
Liquid milk producers are a specialist group of suppliers who have traditionally been paid a premium price to produce milk in off-peak months, thus underpinning Ireland’s year-round access to domestic milk supplies.
The IFA has led several protests this year calling for a minimum 8c per litre increase in the price paid to this specialist group of suppliers.
Dairy groups in the North and South are to form a committee focused on developing an all-island strategy to the all-year-round supply of liquid milk.
“Retailers must be made to understand and accept that to be certain of year-round locally produced quality fresh milk on their shelves, farmers need to be guaranteed an adequate share of market returns, which cannot be squeezed at will,” Mr Cashman said.
“Dairies must stand tough on the wholesale price increases it is reported they have received from retailers, and deliver strong winter premiums and prices reflecting the massive cost increases incurred in the last 12 months.”
The IFA spokesman said that, in recent years, retailers have indulged in turf and price wars in response to the recession. He accused retailers of using low-priced milk to drive consumer footfall and fight for market share, indulging in uneconomic promotions which they have expected farmers and processors to pay for.
“Our dairies must negotiate hard with retailers, and secure our winter prices and premiums for this year, and a long term sustainable approach which remunerates fairly the costs of specialist liquid milk production.
“The consumer clearly values locally produced quality milk, and expects to find it on supermarket shelves. Retailers owe it to consumers to secure those supplies,” said Mr Cashman.
