To garner some insight into how the dairy sector performed in 2021, and to see what the future holds, Agriland caught up with Pat McCormack, president of the Irish Creamery Milk Suppliers’ Association (ICMSA).
Inside the farm gate, 2021 has been has been a reasonable year for dairy farmers, with most experiencing bumper milk prices.
But, rising input costs have seen predicted incomes fall for dairy farms in 2022.
2021 review
In his review of 2021 and how the year impacted dairy farmers, the ICMSA president said: “The vast majority of farmers will look back on 2021 and think, certainly from a profitability point of view, it was a reasonable year.
“Weather conditions were good, inputs were bought at a reasonable price at the beginning of the year, particularly fertiliser.
“But, we cannot underestimate the damage that was done in 2021. It was not all about input costs and the way they have gone up over the year,” he said.
The underlying issue for him, he said, was the bashing that farmers received in some of the Irish media.
“Certainly the national broadcaster left a bit to be desired from COP26. I said it at our AGM, I hope we see Santa Clause coming out of the chimneys rather than clouds and cows, because that’s all we could see during COP26.
“The perception that has been put out there about the supposed damage that agriculture is doing to the environment was hugely disappointing; if we are responsible for one third of the emissions – we got 99% of the blame,” he said.
He continued:
“I am hugely concerned about how CAP [Common Agricultural Policy] has gone; we are seeing 25% of the payment taken off farmers and paid at a flat rate in an eco scheme.
“There seemed to be a different mindset with the [agriculture] minister compared to the last review, where the mindset was to get all farmers eligible for the 30% greening.
“And, to my mind, all grassland farmers and the vast majority of tillage farmers were able to get that payment.”
Going forward, it will be very challenging for commercial farmers to get that payment, which is “extremely disappointing” he said.
Convergence, he said, was a “huge missed opportunity”.
“We would have asked the minister as far back as last spring to take account of the full envelope – the actual sum of money the farmer was getting – if he was serious about protecting the family farms.
“Instead of that, we see very efficient modest holdings losing significant amounts of their payment to potentially very large and, potentially, part-time holdings.
“That is a disappointing outcome of this CAP review.”
2022 outlook
Looking ahead to 2022, the ICMSA president said: “We would hope to see further milk price increases. We certainly feel they are justified with the index returns and what is happening further afield in dairy markets.”
And, while the ICMSA’s main focus is on the the dairy sector, the beef sector is also of interest too.
“From a beef perspective, there is concern out there, particularly about the viability of winter finishing; cattle numbers are looking like they will be scarce up until the end of May.
“We need to see a shift in beef prices alongside milk prices,” he said.
Commenting on the export of calves, he said: “There has been some scaremongering about the exporting of calves in 2022, and beyond. But I would be confident that there is a demand and it will be a viable future option.
“The exporting of calves is absolutely necessary, albeit we can’t be oblivious to the political situation out there.
He is, of course, referring to a greener shade of politics that is growing more popular.
“We see it in Ireland where we have the Green Party in government. There are a lot of environmentalists coming into parliaments across Europe.
“They are not just environmentalists, but they are animal-welfare activists, which are a huge threat to an island nation like ours.
“The question that has been asked in recent times, and rightly so, is are they going to affect free trade within the European Union? Because we are supposed to be a union and it was one of the benefits of joining the union.
“Our animals are performing all around the world no matter where they go, which has to be acknowledged.
“The exporters must also be remembered and investment in facilities and transport is second to none.
“From talking to these exporters, animal welfare is the most important thing on their agenda, because that is what they build their reputation around,” he added.
Challenges
Commenting on the challenges facing dairy farmers he said: “The CAP review has been a huge issue. Normally, if there was a CAP review at the stage it is at – farm level – it would be top of the agenda.
He said he feels that smaller family farms have been undermined, and he reinforced the message that they must be protected in order to be commercially viable in the future.
“That is what really concerns us – the family farm structure as we move forward. Whether it is Bord Bia or Ornua, they use that structure to market our produce globally.”
After all, if the primary producer – that family farm – is not making a margin, there will be no industry, he pointed out.
Final comments
While, unfortunately, Covid-19 is still with us – and looks set to be a feature of 2022 – the ICMSA president said it brought with it the slightest of silver linings in terms of farm labour.
Students who moved home to study online were able to help out a bit more on the farm. And, with farm labour shortages being a serious issue, this was a welcome development for some.
“I’d encourage farmers to take a rest over the festive period but to plan ahead and be prepared as much as they possibly can for the busy spring period that lies ahead.
“No doubt there are challenges we won’t expect, but these are the challenges we know are coming.
“It is also important to stay safe. While the focus has been to stay safe from a Covid-19 perspective, farm safety continues to be a huge issue,” the ICMSA president said.