The Irish Farmers’ Association (IFA) has claimed that increasing costs are leading to a “massive exodus” of farmers from the liquid milk sector.
Chair of the IFA liquid milk committee, Keith O’Boyle said that spiraling inputs have eroded profitability and sustainability for farmers producing liquid milk.
He said that when September 2021 is compared to the same month a year ago, feed, energy and fuel costs have risen by 14%, 21% and 22% respectively
O’Boyle noted that is before fertiliser is taken into consideration, which he said will more than double in cost next spring.
Milk retail price
As input costs are rising sharply, O’Boyle said, “the retail price of milk has remained the same for the past decade”.
“If retailers and consumers want a consistent supply of high-quality, fresh milk throughout the year, they simply will have to pay more for it.
“The National Milk Agency estimates that 70% of milk sells under private label, which typically carries a 27% discount.
“We are seeing a massive exodus of farmers from the liquid milk sector as the premium over the winter no longer covers costs, let alone leaves a profit,” he said.
The IFA claims that 20% of producers left the sector last year.
CSO
Meanwhile, the Central Statistics Office (CSO) Agricultural Price Indices revealed that input costs increased by 15.7% in October 2021 compared with October 2020.
Inputs increased by 3.7% from September 2021 to October 2021.
The data showed that the cost of fertilisers and motor fuels were up 52% and 36.4% respectively on October 2020 prices.
The agricultural input price index for October 2021, which excludes VAT, shows that fertiliser prices jumped by 15.8% in a month.
In the year up to the end of October, the CSO said that straight fertiliser prices rose by 64.5% and the cost of compound fertilisers increased by 49.6%.
The input index also shows that animal feed costs increased by 14.4% in a year, electricity prices jumped by 15.4% and veterinary costs rose by 1.2%.