The farm income crisis has rumbled on, with dairy in particular impacted.
Last week, the Farming Examiner reported that, despite a 7% increase in milk production, there has been a 70%-80% decrease in farm dairy profitability in Ireland.
This is both shocking and, somehow, par for the course.
It has been like this for many months now.
For the past two months, I’ve curated a milk crisis debate on an EU website I manage called ARC2020.eu.
One view came from the French organic dairy sector.
Biolait was created by six French organic farmers in 1994. Biolait now collects from 650 organic dairy farms, supplying 40 dairies.
It pays the same price everywhere in France and collects even from the most difficult of regions (no small feat in a country the size of France).
In their contribution to the milk crisis debate, there were three specific areas Biolait emphasised.
Firstly, the consumption of organic milk in France has gone up by 20% in the previous year and a half.
Individual Irish organic companies using milk — for milk alone, cheese, and/or yoghurt — are performing well at home and overseas.
However, it is not the case that there has been anything like this sort of an increase in Ireland, according to the latest available figures.
Organic yoghurt’s market share fell from 24% to 21%, while organic milk is static at 4%.
With an overall rise in organic sales from €100m to €109m, it’s clear that things are stable but not spectacular for Irish organic dairy sales on the home market.
Secondly, there are strong producer organisations (POs) in operation in the French organic dairy sector.
As they stated in their contribution: “POs control about a third of the contracted volumes. The historical link between the cost of organic milk and conventionally-produced milk from various players in the market is well and truly broken.
"The reason is that price negotiations are based on real world production costs and not some hypothetical international pricing formula that is loaded in favour of contradictory financial interests.”
In Ireland there are a small number of organic dairy farmers and no producer organisation — though organic producers did form the Little Milk Company.
This point on the severing of the link between conventional and organic dairy prices is crucial.
Can it be said that the same holds in Ireland — that there is no link between the two prices?
Finally, production on many French organic dairy farms is based on home-grown forage crops and autonomous feeding arrangements. This undoubtedly makes them more resilient.
In the Irish organic sector — for meat and dairy — feed resilience is a huge issue. While Brexit will most likely make it more affordable to continue to import feed from the UK, the future of potential tariffs makes this a risky strategy.
Biolait also emphasised the following:
(1) Producers need to be fully involved and in control of the volumes of milk that go on the market, especially at certain times of the year.
(2) Autonomous production systems which guarantee that French organic dairy farms can be truly independent of agricultural feed merchants.
(3) The insistence on a credible technical manual — one which ensures that the product has credibility and is traceable, to meet the French public’s expectations.
(4) Use of enforceable rules protecting organic production from the risks of external contamination.
All of this said, it is still the case that the Irish organic dairy sector is not as exposed to the milk price crisis, and to global price fluctuations, as its conventional counterparts are.
Powdered milk is not part of the organic product range, and that’s a central product for the Irish conventional dairy sector.
Still, there are lessons to be learned from the growth of the French organic dairy sector, especially in a context of crisis in dairy generally.
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