Spotlight on long-term milk supply contracts

Top-level meetings between the Irish Farmers Association (IFA) and Ireland’s main co-ops are under way, with a focus on long-term fixed milk supply contracts and milk prices.

According to IFA president Eddie Downey, the subjects broached ranged from the short-term issues of the 2014 milk prices to the much longer term development plans, with particular emphasis on the need to optimise efficiency, including through collaboration with other milk processors and the Irish Dairy Board, to secure the long term livelihoods of dairy farmers.

“We are about a third of the way through our series of meetings with the top leadership of dairy co-ops and we are having very detailed exchanges with them on a broad range of issues of concern to all milk producers,” noted IFA dairy committee chairman Sean O’Leary.

“We are urging them all to boost farmers’ confidence in a difficult early spring by committing to hold prices at current levels for 2014.  With robust demand still sustaining strong dairy prices despite increased global output, this is a very realistic expectation,” he said.

“For the longer term, we are also enquiring in detail into their development plans, how they propose to fund them, and where a farmer contribution is required, how they will minimise recourse to scarce resources by collaborating with neighbouring co-ops.  We are also encouraging them to develop jointly with the IDB fixed price contracts and other hedging mechanisms to help farmers mitigate the impact of income volatility.”

“Where milk supply agreements are being mooted, we have recommended very thorough consultation with co-op members, and have sought to feed into the consultation processes based on the feedback we are getting from IFA members, to ensure that milk supply agreements are truly fair and equitable to farmers,” O’Leary added.

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