A TD is calling for milk processors to sit down with their suppliers to work out a “compromise” for farmers in fixed milk price contracts.

Independent TD Michael Fitzmaurice said today (Wednesday, February 23) that meetings “need to take place” between processors and their suppliers who signed up to fixed contracts, given the “huge increases that have occurred across various inputs”.

“In the past few months, the cost of meal, diesel, fertiliser and energy prices has rocketed – with fertiliser almost trebling in price compared to 12 months ago,” he noted.

“This has left dairy farmers who signed up to fixed-price contracts in a significantly difficult position.

“I have spoken to farmers who signed up to these contracts at a base price of 31c/L in 2020 or early 2021. Currently, the base price is at approximately 40c/L,” the Roscommon-Galway TD stressed.

However, the increase in price is not nearly as significant as the concurrent problem of increasing costs.

“No one could have envisaged the leap in costs across critical inputs in the past few months. This time last year, 31c/L was sustainable, but now it is nowhere near adequate,” Fitzmaurice highlighted.

“The fact is that some milk suppliers face the real danger of going to the wall due to the quantity of milk they have tied into this contract.”

The TD called on “all of the processors” to meet with their suppliers who are tied into fixed milk price contracts and who have been hit hardest by the surge in input costs.

“Workable compromises need to be reached. Otherwise, these processors will see some of their suppliers go out of business,” Fitzmaurice warned.

As Fitzmaurice referred to, prices paid to farmers for milk are on a steady upward trend at the moment.

Just yesterday, Carbery Group announced an increase in its milk price for January supplies of 2c/L.

A spokesperson for Carbery said that the board agreed the increase due to the “continuing strong performance of dairy markets, and particularly the improved performance of cheese markets”.

Carbery follows on from Glanbia, Dairygold, Kerry Group and Lakeland Dairies in the upward milk-price trend.