The relative position of Irish dairy farmers in the European milk price league clearly highlights the alarming position that Irish dairy find themselves in at present and serious questions now need to be asked as to why Irish milk prices have gone from nearly the top of the league in January 2023 to the bottom of the league in June 2023 according to Mr Noel Murphy, Chairperson of ICMSA’s Dairy Committee.
“The facts,” Mr Murphy said, “speak for themselves. According to the ZuivelNL milk league, the average price paid across the EU in January 2023 was 54.29c/kg (4.2% fat, 3.4% protein) while the average price paid by the Irish processors in the league was 54.5c/kg with the top Irish processor paying 57.13c/kg. By June 2023, the average EU price was 42.65c/kg while the average Irish price was 38.5c/kg with the top-paying Irish processor at 39.22c/kg. Significantly, in the same period, Fonterra paid 38.34c/kg in January 2023 and its price has only fallen to 34.38 by June 2023.
“It is quite clear that Irish dairy farmers have taken an unacceptable hit compared to their EU counterparts on milk price and serious questions need to be asked in this regard of our processors.
“Why in the space of six months have Irish processors gone from paying a price above the EU average and sitting close to the top of the league to now paying a price over 4c/kg below the EU average, a price not much better than Fonterra that operates in commodity markets and our three processors in the league fill three of the bottom four positions in the league.”
Mr Murphy warned that this is a very serious development in terms of the economic viability of dairy farmers and there is growing anger amongst farmers in relation to the massive reductions in milk price.
“Farmers understand that the market has weakened but what they will not tolerate is Irish dairy farmers taking a bigger hit than their EU counterparts and that 4c/kg differential with the average EU milk price for June is simply massive in the context of income and whether farmers are producing below the cost of production.
“With the latest reduction by Irish milk processors and with the weather woes facing farmers, many farmers are now in a loss-making situation and it would appear that weak selling by our processors or protecting their own margins is a big factor for milk price at present. Co-op boards need to wake up to the pressures on dairy farmers at this time, they need to address the differential between their price and the average EU price and they need to start asking serious questions of management in relation to milk price reductions.
“Our milk processors are very good at preaching to us about sustainability but seem to have forgotten totally about economic sustainability. Sustainable prices are needed for dairy farmers and the prices being delivered today are simply unsustainable Co-op boards need to call a halt to milk price reductions and rapidly bring Irish dairy farmers at least in line with the EU average,” concluded Mr Murphy.
