Dairy farmers invited to give their views on price volatility

Dairy farmers based in Co. Cork have been invited to give their opinions on price/income volatility at two upcoming events.

Working in collaboration with – and with the support of – Cork County Council, Cork Institute of Technology (CIT) is proposing the development of dedicated education offerings for dairy farmers to enable them to acquire new skillsets to increase awareness of the implications of price volatility.

As part of this process, CIT has organised a number of meetings in order to gain as broad a range of views as possible.

These information and consultation events will take place on:
  • Wednesday, April 18, in the Wallis Arms Hotel, Millstreet, Co. Cork;
  • Wednesday, April 25, in the Firgrove Hotel, Mitchelstown, Co. Cork.

Both events are scheduled to commence at 7:30pm.

‘Bespoke education offerings’

According to the organisers, price/income volatility is now a well-established challenge in the dairy sector.

Continuing, CIT stated that extremely low dairy product prices cause many financial problems for dairy farmers and can ultimately threaten solvency. Meanwhile, extremely high prices result in product substitution which can subsequently be difficult or impossible to reverse, it added.

“Dairy produce buyers prefer to conduct business with more price-stable sectors due to the benefits that product price stability can bring to financial planning and customer relationships.

“This preference for price stability has seen buyers favour the implementation of fixed-price contracts and a move towards products displaying lower levels of price variability.

“In an effort to enhance sustainability and competitiveness within the industry, there are numerous tools which can help manage volatility. These tools range from diversification, forward contracts, dairy-derivative contracts and insurance to policy initiatives.

However, each actor within the supply chain will respond to volatility based on their own unique circumstances.

“As such, no one tool is suitable to all members in the supply chain and thus a suite of tools and mechanisms has developed. The use and growth of these tools is conditional on those in the sector understanding their use and role in managing price and income volatility,” the organisers explained.

Meanwhile, Dr. Declan O’Connor – from CIT’s Department of Mathematics – indicated that the institute is “particularly interested in engaging with the various stakeholders, including farmers, on the structure and content of bespoke education offerings which will form part of our Farm Education ([email protected]) programme”.

Dairy farmers are being encouraged to attend the event by the mayor of the County of Cork, councillor Declan Hurley.

“As a dairy farmer myself I am only too familiar with the uncertainties of this industry. As such, I am very pleased to announce Cork County Council’s support for such a fitting project. I look forward to the dairy sector of Cork sharing its views and examining such options,” he said.