Traumatic winter leaves dairy farmers in need of a boost
Just how tough the milk business can be has been described by Glanbia Ireland CEO Jim Bergin.
He has explained why Glanbia Ireland and other milk processors co-ops cut prices for February milk, just when dairy farmers thought things couldn’t get worse. Bergin has acknowledged the milk price cut was made even as determination and resilience were being been tested to the limit on dairy farms.
Dairy farmers were reeling from the effects of the prolonged winter, and of tough farming conditions in some places since early in the autumn of 2017, which increased workloads and costs on farms.
Then, severe snow and icy conditions brought the country to a halt, hitting dairy farmers in the midst of the calving season, on top of their difficulties in hiring good help for their busiest season. The Glanbia Ireland CEO said, “Thankfully, we have come through it without loss of life.”
That’s how how tough the milk business can be — it was nothing less than a matter of life or death for farmers, their employees, and milk hauliers trying to cope with the Storm Emma conditions. Bergin welcomed the “glimmer of hope” in the longer evenings and increasing daylight, but urged farmers to keep their personal safety front and centre at this incredibly busy time, when tiredness increases, until calving finishes, the weather improves and the pressure reduces.
Clearly, industry leaders and managers recognise the sacrifices of dairy farmers. But it’s a tough business, and Bergin also had to warn dairy farmers markets for the products made from their milk are proving as difficult as predicted.
His bad news is that dairy trading is being conducted in a range equivalent to a farm gate price of only 27 to 29 cents per litre across the globe. Therefore, the Glanbia base milk price reduction for February is “only a first step in stemming the losses from trading”.
In other words, most Irish co-ops had held milk prices virtually unchanged for five consecutive months, but could no longer afford to pay farmgate milk price below the dairy market returns they were earning. Unfortunately, further price reductions are inevitable until we reach an equilibrium with market returns, revealed the Glanbia Ireland CEO.
Glanbia management are hopeful that the tide will turn positive again in the fourth quarter of 2018.
Those are the cards the country’s biggest milk processor has put on the table. And the situation is unlikely to be much better in other co-ops.
At least, Glanbia Ireland has more milk in fixed price schemes than ever before, and provided assistance of 20 cent per litre for milk lost due to Storm Emma difficulties. Whether that is enough to bolster the much tested determination and resilience of dairy farmers remains to be seen.
Theirs is the only farming business capable of generating incomes somewhere near the average industrial wage for a 40-hour week.
But the average industrial worker does not have to risk his or her life, or go from one year of high wages to another of survival on low income. The ordeals of this spring must raise questions about the sustainability of Irish dairy farming, in the context of economic recovery which will pull workers away from farming, as it did during the last economic boom. Hence the need for the dairy co-ops to give their dairy farmers every break they can, if the job is to stay attractive for a next generation likely to have increasing alternative career options.
They can start by using bonuses from Ornua — which IFA National Dairy Committee Chairman Tom Phelan expects will be paid in April — to support farmers. He said co-ops that work with Ornua can expect a 58% increase in trading bonuses, thanks to the former Irish Dairy Board’s 18% revenue growth made possible by the hard work of Irish dairy farmers increasing their milk output.
“That’s how how tough the milk business can be — it was nothing less than a matter of life or death for farmers, their employees, and milk hauliers trying to cope with the conditions” Storm Emma