Co-ops ‘have 3 crucial questions to answer’ on 1995-level prices

Co-ops have some serious questions to answer following cuts made to February and/or March milk prices, with prices now at 1995 levels, according to the Irish Farmers’ Association (IFA).

Reacting to the recent cuts, IFA National Dairy Committee chairman Tom Phelan said:

“Bearing in mind that many industry spokespeople predicted only a couple of months ago that 2019 milk prices would be about on par with last year’s, co-ops owe it to their suppliers to signal that this is the end of milk price cuts for 2019.

“Farmers need every cent as peak approaches to clear their massively increased 2018 bills,” Phelan said.

The dairy chairman outlined that there are three crucial questions co-ops and industry must answer:
  1. Why are milk prices back to 1995 levels when massive investment has been made by co-ops, Ornua and Bord Bia in processing and marketing?
  2. While farmers are delivering on higher quality milk and sustainability, where is the value pay-back to them through improved remuneration for their milk?
  3. Why are the dairy industry and Bord Bia allowing infant formula manufacturers to flout the spirit of Origin Green by importing SMP from countries which do not operate anything like the SDAS?

Phelan continued, outlining a series of “relevant facts” on the matter.

Since 2015, Irish dairy farmers have invested well over €1 billion on farms, and over the last couple of decades, they have added considerable value to their milk by improving all quality indicators, yields and milk solids, with butterfat up 12% and protein 8% since 1999, he noted.

Sustainability

“Since 2013, they have also engaged with the concept of sustainability, with 100% of farmers participating in stringent audits every 18 months to obtain certification under the Origin Green’s Sustainable Dairy Assurance Scheme (SDAS).”

He added that, since the end of milk quotas in 2015, the Irish dairy industry has invested over €500 million in additional stainless steel to process the extra milk produced by farmers into products in high global demand, noting that many co-ops have plans to invest further.

Bord Bia, Ornua, and individual co-operatives, have all spent “considerable sums” on marketing and identifying new markets and products to up the value of the national mix.

Farmers have been told for years that infant formula manufacturers had the most exacting of standards when it came to the quality and specs of milk and dairy products.

“They were used to justify often costly demands on farmers to engage with numerous milk quality improvement schemes and participating in SDAS,” Phelan said.

Investment

“So, farmers legitimately ask: When all this investment has been made on farms and in industry to generate value, when a national food sustainability strategy has been developed and farmers are delivering on it, how come we still, this month, are looking at a 1995 milk price?

“Our industry must do better. But right now, they must clearly state to dairy farmers that they have seen the end of milk price cuts for 2019,” he concluded.

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