'Savage milk price cuts' from dairy processors in past three months
The Irish Farmers' Association (IFA) has said that processors have to "share the pain" during the current dairy market downturn.
IFA Dairy Committee chair Martin McElearney called on milk processors to work with dairy farmers in sharing the financial cost of the current challenges facing the sector.
"In the space of three months, dairy processors have undertaken savage milk price cuts, with as much as 10c/L taken off the base milk price.
"Farmers feel completely exposed to these cuts and are rightly asking why they seem to always the first to pay the price when markets decline,” he said.
Dairy
Since September, McElearney said that the price dairy farmers received has fallen sharply by over 20%, while overall cost of production remains unchanged.
"Many farmers are rightly asking could processors have done more to lock in product earlier in the year when the market returns were higher.
"This would have insulated milk producers to some extent from the swingeing cuts now being imposed.
"This type of price volatility is knocking dairy farmers’ confidence which is already fragile given the ongoing uncertainties surrounding the nitrates derogation,” the IFA Dairy chair said.
Milk price
In recent days, processors have announced another round of milk price cuts for supplies in October.
This comes as very strong global supply continues to outpace consumption, which is weakening prices on dairy markets.
Carbery Group today (Wednesday, November 19) announced its milk price for October supplies, confirming another fall in its average price.
Carbery said that if this decision is replicated across the four West Cork co-ops; Bandon, Barryroe, Drinagh and Lisavaird, this will result in an average milk price of 42.6c/L.
Tirlán previously confirmed that it will pay a total of 38.08c/L, including VAT, for October milk supplies at 3.6% butterfat and 3.3% protein. This is down 4c/L on the previous month.
The Dairygold board said that it has reduced the October 'Quoted Milk Price' by 3.25c/L to 38c/L.
Kerry Dairy Ireland confirmed that it will pay milk suppliers 41c/L for October milk supplies, including VAT, quality and sustainability bonuses. This marks a reduction of over 3c/L when compared to the September price.
Lakeland Dairies agreed a price of 40.25c/L at 3.6% butterfat and 3.3% protein to be paid for October milk in the Republic of Ireland, which is inclusive of the 0.5c/L sustainability incentive payment.
This is a reduction of 4c/L on the price paid in September and follows a cut of 3c/L last month.
