Farmers are set to lose thousands of euro in revenue because of milk price cuts since the beginning of the year, the Irish Creamery Milk Suppliers’ Association (ICMSA) has warned.
Lakeland Dairies today (Monday, March 13) confirmed a further 6c/L cut in its milk price for February supplies.
According to Pat McCormack, president of the ICMSA, this will translate into an “income hammer blow” for some farmers and is “unsustainable”.
The ICMSA estimates that based on a farmer supplying 400,000L to Lakelands, the latest price cuts could result in a drop in revenue for 2023 in the region of €48,000.
The president of the ICMSA said farmers were being dealt “savage cuts in milk price” while food inflation at both national and European Union level was pushing the retail costs of milk, butter and cheese to new highs.
McCormack said farmers are asking themselves that if consumers are paying more for food particularly milk, butter and cheese – and the bulk of Irish dairy exports are going to the EU and UK – then why are price cuts being implemented?
He questioned whether this is an example of “margin-grabbing and soft selling” at the expense of Irish farmers.
McCormack said in a scenario where retail prices are rising but farmers are getting less for their product, then who is the margin going to?
“Everyone must remember that input costs have not come back to realistic levels, with particularly Irish fertiliser prices way out of kilter with the EU.
“Electricity and energy prices are still at unacceptably high levels for small businesses like farmers and interest rates continue to increase,” he said.
The ICMSA president has today called on co-operative boards to implement an “immediate strategy to bring farm input costs, such as feed and fertiliser, back to realistic levels”.
McCormack said: “The co-op boards must demand and get margins from a marketplace which continues to experience inflation, and they must translate the reduction in energy costs that larger businesses are getting – specifically on the gas used for milk processing – into savings that allow them to protect farmer milk price from these kind of savage cuts.”