‘Producing a highly valued product below the cost of production is not tolerable’
Over the past 14 months dairy farmers have been producing a highly valued product, but they have been doing so below the cost of production, the President of ICMSA, John Comer has said.
Speaking at the ICMSA AGM in the Castletroy Park Hotel in Limerick today, he said that this is not sustainable, nor is it tolerable.
Over the last year dairy farmers have seen a milk price collapse, he said, and no other words should be used to describe it.
ICMSA has estimated that the loss to Irish dairy farmers in 2016 relative to 2014 is €650m and €1.1 billion to the wider already struggling rural economy.
The President of the ICMSA said that 2016 has been a year that has been more or less a disaster for Irish dairy products.
Global dairy markets have strengthened since July, prices have improved but the milk price being returned to farmers is still below the cost of production.
“I believe that milk price in 2017 will see further improvements but the long term sustainability of these prices is the challenge.
“The response to the 2016 collapse [by the Government] was totally inadequate and too slow.”
Comer said that that the ICMSA is also concerned that the European Commission has announced its intention to sell product from intervention shortly despite the fact that the base milk price is still below the cost of production.
This is very premature and deferred until the recovery is more established, he said.
On Brexit, Comer said that the EU needs to take responsibility for its decisions.
“We were the fall guys for the Russian ban. Basic Payment Scheme, Greening and any other payments cannot be cut because of Brexit.
“People always say about Brexit-proofing – the best way to this in the near term is to get our costs right.
“Brexit, Mercosur and TTIP – all of these dynamics have a lot of implications for us as primary food producers.”
Concluding, Comer said that 2017 is going to present farmers with enormous challenges with regards to numbers.
He said that the whole industry needs to develop new markets and that more beef will be coming from the dairy herd next year.