Despite negotiating somewhat better contracts, liquid milk farmers will still be producing below the cost of production this season.
The IFA National Liquid Milk Committee had its final meeting of the year this week, as most producer groups have finalised their 2015/16 milk price negotiations.
Its Chairman Teddy Cashman said against the backdrop of the mobilisation of liquid milk producers in an IFA campaign in the last two months, most producer groups have been able to negotiate somewhat improved price outcomes for the winter 2015/16.
“That said, the average price farmers will receive across the year will still fall around 8c/L short of a price which would allow specialist liquid producers to cover their production costs and pay themselves a modest wage,” he said.
Fears have been raised that in the post-quota era farmers will leave winter milk production. Some have particularly cited the most efficient winter milk producers as those which could be most likely leave the sector.
Teagasc research has shown that winter milk producers are only making €60/cow more than spring milk producers and securing this extra cash margin is dependent on a winter milk bonus.
“At our meeting today, members were keen to stress that farmers needed to optimise their winter payment, and produce as little additional milk as possible over and above their contracted volume, as this would not be paid for as liquid milk,” he said.
“I would urge liquid and winter milk producers out there to match as exactly as they can the number of cows they will be calving next autumn to their liquid milk contract. Anything in excess of contract will lose them money,” he said.
“For the long term, not only do farmers need to better match calvings to contract, they also need to receive well-structured payments which give them adequate remuneration for their costs and their labour, and by channelling a fair share of stable retail returns back to farmers, will systematically offset volatile base milk prices,” Cashman said.