Multinational retailer Iceland has moved to increase its milk price for fresh milk suppliers by 2c/L in light of current harsh environmental and financial conditions nationwide.
The company confirmed that this extra 2c/L being paid directly to the dairy farmer will be fully absorbed by Iceland Ireland and will in no way be passed on to the customer.
Commenting on the move, managing director or Iceland Ireland Ron Metcalfe said: “Fresh product is a huge part of our business throughout Ireland.
“This commitment hits the mark on all fronts for the communities we serve.’’
This has been welcomed by Irish producer groups including the Irish Farmers’ Association (IFA) and the Fresh Milk Producers (FMP).
Irish Farmers’ Association (IFA) president Joe Healy acknowledged the move by Iceland to support Irish liquid milk farmers.
Healy welcomed the statement by Iceland confirming that it has instructed its milk supplier to pass the extra 2c/L directly to its liquid milk farmers in Ireland.
“The weather has been against dairy farmers over the past 12 months, firstly by the extended wet period and late spring in 2018 and the more recent two-month period of drought conditions, which resulted in no grass growth in most dairy regions of Ireland.
This has placed extra costs of between €5,000 and €10,000 per month on the average dairy farmer.
“Liquid milk farming is a specialised operation which incurs extra costs of feeding, labour management and capital investment.
“While growth conditions have improved in many parts of the country in recent days, there is a massive deficit in winter forage supplies which will continue to place a huge financial strain on all 1,800 liquid milk farmers in Ireland.”
John Finn, Galway liquid milk producer and national chairman of the IFA Liquid Milk Committee added: “Irish liquid milk farmers operate on very tight margins in normal weather years with the cost of producing year-round liquid milk recognised as being 40c/L.
With the reduced milk price in 2018, liquid milk farmers are going to run at a deficit and the extra cost of feeding due to the weather conditions will only exacerbate the situation on farms.
“There is no scope to absorb a crisis like this and without substantial support from all retailers and milk processors, 2018 will push many of our liquid milk suppliers to breaking point,” Finn warned.
FMP chairman Jim Mulhall also lauded the moved by Iceland, saying: “The weather has been against liquid milk dairy farmers over the past 12 months, firstly by the extended wet period and late spring in 2018, and the more recent 10-week period of dry weather, which saw many dairying regions receive minimal rainfall from early May, until 2 weeks ago.”
Liquid milk farming is a specialised operation which incurs extra costs of feeding, labour management and capital investment, according to the group.
While growth conditions are much improved, there is a huge deficit in winter forage supplies, which will cost liquid milk farmers dearly to replace.
Mulhall called on all other retailers of fresh milk to take note of this move and follow in Iceland’s lead in supporting Irish liquid milk dairy farmers.