Retailers have come under increased pressure for the “unsustainable discounting” of fresh milk.
Dairy farmers have reacted angrily to moves by retailers to drop the retail price of milk. Aldi is currently selling fresh milk at €1.30 for 2L in a number of its stores, while Iceland is also offering a deal of 4L of milk for €2.60.
Sean Condren, a fresh milk producer from Gorey, Co. Wexford, told AgriLand that the cuts are affecting farmers seriously at the moment.
“We’ve nearly been hit with everything this year. Between Storm Ophelia, the snow and now the drought, retailers dropping the price of milk is the last kick. It’s serious and we are backed into a corner and we will have to call stop somewhere.”
Commenting further, Sean said: “It’s not on at all. They’re using milk as a loss-leader to bring customers in. The farmers are the fall guys.
Once they’re selling a big percentage of milk at that money, the next move they’ll make is to go back to the processor and it will bite us eventually. The producers will be the ones to suffer most.
“It’s scandalous and it will have to be stopped. We are backed into a corner and it’s a dangerous place to be, as farmers will fight harder.”
Sean is just one of the many specialised fresh milk producers who struggle to make milking over the winter months stack up financially.
“I am milking about 148 cows at the moment. I was calving all-year round, but I’m voting with my feet out of winter milk.
“I am drastically cutting down on it, as it’s just not paying the bills and I can make more money calving cows in the springtime.”
Shane O’Loughlin, a dairy farmer milking 200 cows in Monasterevin, Co. Kildare, was also critical of the retailers’ tactics.
“Retailers are cutting prices and using milk to bring more customers into their stores. When one or two start dropping the price, it gives the others permission to pull prices.
“Aldi and Iceland aren’t helping and something will have to be done. Liquid milk producers need an annualised milk price of 40c/L.
When retailers sell milk for 65c/L, there’s no margin for the processor and its adding to the frustration that farmers are feeling.
“Customers are under the impression that milk can be produced for that price; it’s not sustainable the way liquid milk is going.”
Each year, Shane calves approximately 50 cows in the back end of the year to ensure a year-round supply of milk. However, with the challenges this spring and summer have presented, his costs have increased significantly.
“I haven’t spread fertiliser in weeks and even if we got a substantial amount of rain, it will be another week or two before grass starts growing.
“I’ve grazed 30ac of second-cut silage and I’m hoping to take a late cut of silage in September. We’re eating into next winter’s feed reserves and its costing us.”
A member of the Teagasc/Glanbia Monitor Farm Programme, Shane recently completed costings in relation to how much much extra this year has cost in terms of extra feed.
“Richie O’Brien and I sat down recently and we came to the figure that it’s costing €400/cow or €80,000 for the whole herd to just keep the cows ticking over.
“I’ve made the decision to dry 20 autumn cows off early. I’ll be losing six weeks of valuable milk, but it’s necessary to stretch out the grass,” he noted.