An official request from the Irish Farmers’ Association (IFA) to Tirlán to maintain the inputs support payment for milk suppliers at 6.5c/L throughout 2023 remains on the table, as the board of the co-op meets today (Thursday, January 19).
In its correspondence to Tirlán, the IFA also highlighted the impact of inflationary pressures on production costs and asked the 100% farmer-owned co-op to increase the base price to acknowledge this.
The correspondence from the IFA to Tirlán followed a resolution passed by its members at an information meeting for Tirlán’s fixed milk suppliers earlier this month in Co. Kilkenny.
The Tirlán board meeting today takes place following a series of farmer information meetings organised around the country by the co- op which ended this week.
It previously outlined that the meetings were designed to “provide shareholders and suppliers with an opportunity to engage directly with Tirlán management and board members” and to hear about the market outlook for 2023.
Fixed milk price
The issue of milk prices and fixed milk-price contracts was high on the agenda for farmers who attended the Tirlán meetings, with some heated exchanges taking place on the subject.
Concerns about where milk prices might be heading in 2023 have fueled discussions at recent meetings held by both Tirlán and the IFA.
In its latest Economic Outlook for Irish Agriculture report, Teagasc has forecast that a resumption in global milk production will likely dampen demand growth and drive down milk prices by 15% in 2023.
In the meantime, Tirlán has confirmed that it plans to close its latest Fixed Milk Price Support Scheme, which had an initial closing date of December 20, 2022 and was then extended to December 30, by the end of this week.
The IFA had described the original closing date as “completely unrealistic” and although Tirlán publicly maintained that it would not extend the date past December 30, it had little choice but to prolong the scheme.
Tirlán mediation process
Separately, the co-op has also indicated that it will engage in a “mediation” process with a group of farmers significantly impacted by fixed milk-price schemes from next month.
The group comprises Tirlán suppliers who committed a “significant percentage” of their milk to fixed-price schemes.
These farmers, who do not want to be publicly identified, claim that they have been “seriously disadvantaged” by signing up to the fixed-price schemes because of inflationary costs and the differentiation on milk prices versus fixed prices.
Supplier participation in the fixed milk-price schemes was voluntary and was on the basis that milk volumes would be paid at a stipulated fixed price for a certain period of time.
Tirlán introduced a fixed milk-price support scheme last year to assist farmers who were heavily exposed to the fixed milk-price scheme. It is understood that the group of farmers who will engage in the mediation process is seeking a “resolution” to the price differentiation.
One Tirlán supplier, who is also a member of IFA, told Agriland that “it comes down to what the co-op are going to do to support its members”.
“This is a problem and it can’t be a surprise to them that this is not going away. I’ve listened to Jim Bergin [Tirlán chief executive] at information meetings telling us how they’re supporting farmers but I’m not seeing that support.
“I can only speak about my own experiences and I know what I’ve lost from getting involved in the fixed milk-price scheme.
“There has to be some accountability from the board and what I and other farmers now want them to do, is to seriously consider setting up a special compensation scheme that would support badly affected farmers. We know that they will have the profits to be able to do that.”