The president of the Irish Creamery Milk Suppliers’ Association (ICMSA) has said that some progress has been made on the contentious issue of fixed milk-price schemes.

Speaking at a meeting of the Kerry ICMSA executive, Pat McCormack said that suppliers who signed up for contracts in good faith at between 30c/L and 32c/L “are now well short of the mark” on current milk prices.

He noted that it was a personal decision to avail of such contracts and the ICMSA had advised farmers “to enter them with caution”. He added that the schemes were “never there to beat the market”.

ICMSA meeting

The ICMSA president acknowledged that nobody foresaw the substantial increases in the price of feed and fertiliser which are impacting the cost of production.

A farmer attending the meeting asked if war is considered a “force majeure”, adding that it would be “unethical” to hold struggling farmers to the fixed-price contracts.

Another milk supplier claimed that such contracts were encouraged by banks in a bid to de-risk farm investment.

One farmer said he was aware of suppliers who have 100% of their milk in fixed-price contracts.

McCormack said that the schemes were never meant to have such large volumes of milk.

He noted that some processors had come forward with measures to help suppliers in difficulty but it was “nowhere near what is reflected in the marketplace at this time”.

The ICMSA president said that he highlighted the plight of struggling suppliers in meetings with Ornua.

He said that progress has been made on the matter and was hopeful an announcement would be made through the co-op structure.

McCormack said that a resolution to the issue needs to be found for very-exposed and indebted farmers, some of whom are young and have expanded significantly.

He said this is needed for the future of fixed milk-price schemes and more importantly for farmers.

Milk price

The ICMSA president also told the meeting that early spring figures show a 1.5% drop in global milk supply. He said that while the supply remains negative “it will be a huge ace in our hand”.

McCormack predicted that milk price will be in excess of 50c/L for the peak milk supply months and beyond.

The Co. Tipperary farmer sounded a note of caution about the total Irish milk supply for this year but felt that it would be “there or thereabouts” compared to 2021. European milk supply will be back by between 5-10% by the end of 2022, he said.

McCormack also highlighted how increasing food costs are impacting on consumer demand especially in “third countries” which are key markets for Irish produce.

silgae being cut and monitoring farm safety

Meanwhile, the ICMSA president urged the farmers at the meeting to make enough of silage. “It’s not a year to be short,” he said.

“In the past when we were short we sent the minister or anyone else we could off on a plane to get a boatload of fodder. That won’t be available anywhere else this time around,” he warned.

McCormack advised those planning on moving stock to do so earlier rather than later in the year, if possible.

The ICMSA president also reiterated his call on Minister for Agriculture, Food and the Marine Charlie McConalogue to bring forward a fertiliser subsidy.