The market forces have been failing liquid milk and the margins are not there anymore, according to IFA Liquid Milk Chairman Teddy Cashman.
Speaking at the IFA Liquid Milk Forum he said that milk is an ‘added value’ product, not a commodity, but the incentive is not there if the price differential is not there.
He said other dairy farmers ask ‘why you are in liquid milk if there are no margins – when you could go skiing?’ “Liquid milk farmers are doing the over time and people on overtime demand a overtime rate and we deserve it. Adequate renumeration means we need to be compensated for the extra work and cost in producing liquid milk. We in IFA set out to put out clear targets as to what they should be getting. Adequate renumeration has not been there on an ongoing basis.”
He also warned that liquid milk from Northern Ireland is not the simple answer if the Irish supply starts to dry up. “At the moment Northern milk represents 26% of the market here. It’s unclear whether it can fill gaps in the market if we are not incentivised to.” Northern Irish milk does not have a differentiation between manufacturing and liquid milk and therefore Northern producers can and may change if it suits them financially.
The options for the industry to ensure a continued supply of Irish liquid milk, he said are:
- Get commitment from all stakeholders;
- Official inclusion of fresh milk in Food Harvest 2020 scenario;
- A revitalised National Milk Agency which would include all the larger retailers;
- The National Milk Agency/Teagasc to assess the economic sustainability of producer pricing systems and to monitor and flag input cost volatility in real time; and,
- A follow up stakeholders meeting in the autumn.
“The most important thing is that we need a solid plan and we need to plan that the supplies will be there.”