ICMSA: Dairy farmers can 'ride out' US tariffs
The president of the Irish Creamery Milk Suppliers Association (ICMSA), Denis Drennan believes that the "underlying strength" of Irish dairy products should ensure its members can "ride out" US tariffs until the situation becomes clearer.
The ICMSA president said there was a "degree of anxiety" around the threat the "so-called Trump tariffs" presented.
According to Drennan, the reputation of Irish cheese and butter - specifically Kerrygold - stood very high amongst top-end US consumers.
He believes there was confidence among stakeholders that premium products like Kerrygold were "inelastic" in terms of demand and not overly subject to price-pressure.
Drennan said: "Tariffs are always a crude economic tool, and it’s disappointing because it comes at a point where the excellence of Irish dairy had really cut through in the US market.
"The New York Times only recently declared Kerrygold as the best butter available in the country, and this reputation was manifesting itself in healthy sales which were feedbacking through Ornua and into the various component co-ops back to the farmer-suppliers."
"That demand for butter is principally responsible for the lift in milk price that began in the middle of last year after two very hard years, and alleviated some of the really serious pressures our dairy farmers were under for the previous period," he added.
The ICMSA acknowledged that tariffs represent a hurdle that the association will deal with, but one it "could have done without”.
Drennan said that the response is out of the ICMSA's hands "to a degree".
He said: "We’d caution the government against allowing other bigger (EU) member states to fight a trade war at our expense. Ireland’s economy is more open than our counterparts in the EU, and we are more dependent than they are on exports.
"Even within our export sector, it’s our food exports that are the ones earning the revenues that go back into the rural communities that produce that food.
"Other sectors like pharma and tech are notably less indigenous, and while their exports earnings and tax are invaluable, they don’t reach down to the grassroots in the way that dairy and beef almost literally do," Drennan added.
