Liquid milk producers should assess the profit margins they achieved in recent years before making business choices for the post-quota era, said IFA liquid milk committee chairman, Teddy Cashman.
Speaking in Dublin yesterday at the first ever IFA Liquid Milk Forum, ‘Securing Fresh Milk Supplies Post 2015’, the speakers reflected the genuine insecurity milk producers feel for their specialised business eight months before milk quotas come to an end.
Many farmers are considering a move away from liquid milk production back into less cost-intensive mainstream manufactured milk.
Regulated by the National Milk Association and underpinned by price bonus systems, liquid milk is a specialist category originally formed to ensure a year-round supply of fresh milk for Irish consumers. However, the domestic retail market has changed significantly in recent years.
Teddy Cashman said: “If you were a fresh milk supplier in 2013, you calved half your herd in the wettest spring in decades, the other half in the autumn, you milked your cows 365 days a year, and fed them to keep them productive through the winter, all this for a price 0.8c/l higher across the year than a manufacturing milk producer — but at a much higher cost, and therefore for a lower margin.
“With the end of quotas, Irish dairy farmers will be able to grow their business and produce more milk unimpeded.
“But they will do so on the basis of very cold-blooded business decisions.
“The growth opportunities are for export milk in the context of fast growing global dairy demand, not for fresh milk for a static Irish consumer market,” he warned.
IFA-led liquid milk protests of recent years have unsuccessfully sought an 8c per litre increase from retailers in the price paid to this specialist group of suppliers.
Import surveys by the association have shown consistent rises in the levels of milk being imported by retailers in recent years, thus undercutting the market for fresh milk.
“In this context, how can we be sure there will always be adequate amounts of quality, locally produced fresh milk to cater for consumer needs all year round?” stated Teddy Cashman. “We want to challenge all stakeholders on this very simple theme.
“Many other Western countries — the US, the UK, Australia, New Zealand — have encountered difficulties in sustaining fresh milk supplies, and have had to introduce structures and measures to protect them. We also have such structures, in the Milk Supply Act and the National Milk Agency — but in the context of our cut-throat retail market, they need reviewing and strengthening to become fitter for purpose.”
Yesterday’s IFA liquid milk seminar was opened by IFA President Eddie Downey and chaired by Pat O’Keeffe of the Irish Farmers Journal.
© Irish Examiner Ltd. All rights reserved