Urgent need for producer price increase highlighted

IFA President John Bryan has written to all the main retailers and dairies and called for an immediate liquid milk price lift for farmers, to off-set the huge feed cost increases which the 2012 winter milk prices simply do not cover.

IFA President John Bryan has written to all the main retailers and dairies and called for an immediate liquid milk price lift for farmers, to off-set the huge feed cost increases which the 2012 winter milk prices simply do not cover.

“IFA has spent the last two to three months highlighting the plight of farmers to both retailers and processors, explaining the need for a 5c/l increase to sustain year-round quality locally produced fresh milk supplies, so far without any satisfactory response from dairies. This is simply not acceptable, and the patience of liquid milk suppliers is running out,” Mr Bryan said.

“The National Liquid Milk Committee will be meeting next week, and I have today written to all dairies and retailers to remind them that they cannot ignore the economic realities of producers, and must ensure a larger slice of market returns is paid to farmers to secure high quality locally produced, fresh milk supplies year-round,” he added.

“Today, farmers are putting down a clear marker. Dairies and retailers must take action now and return a higher milk price before the end of the month,” he said.

Commenting on the severity of the cost/price squeeze, IFA National Liquid Milk Chairman Teddy Cashman said an immediate price lift was needed to deal with the massive increase in the feed bills farmers have to pay this month. “Liquid milk prices have come back by 2 to 3c/l between 2011 and 2012 to around 32c/l + VAT, but feeding costs alone have increased production costs by over 4c/l on liquid milk farms, as measured by Teagasc’s Dr Joe Patton. All dairies are well aware that, to cover costs and pay themselves a modest wage, farmers this year need an annual average price of no less than 40c/l, and they must pay farmers a higher milk price immediately. In recent months, we have substantiated this situation in detail with all the main retailers,” Mr Cashman said.

“I have been talking about the need for an exceptional feed surcharge since the summer, but now, the crunch has come with the winter feed bills, and farmers simply need an immediate increase in their winter payment just to pay those bills,” he said.

“Dairies must respond immediately, secure a price increase from the retail chain for farmers, and pass it back in an increased producer price without delay,” he concluded.