Trau­matic win­ter leaves dairy farm­ers in need of a boost

Irish Examiner - Farming - - COMMENT - Stephen Cado­gan

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

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