IFA lobbies for 10c/l increase on winter milk price

AN increase of 10c/l for winter milk over last year is being sought by the IFA, as talks start with dairies on the 201819 price.

The IFA demand comes as Kerry Group became the latest processor to hold its manufacturing milk price for September. Kerry is on 32c/l, VAT inclusive. Last week, Glanbia and Lakelands held their September milk prices at 32c/l and 32.78c/l respectively.

The IFA is seeking an annualised fresh milk price of 40c/l for the 2018-2019 production year in recognition of the increased costs involved in the sector.

“In the last 12 months, the creamery milk price base has gone back by up to 4c/l,” said John Finn, IFA liquid milk chairman.

“To secure the continued commitment of specialised producers to the costly autumn calving and year-round supply system, and to take due account of the massive impact of the fodder crisis on feed costs, any winter payment will have to be increased substantially on last year’s levels.

“Farmers have come closest to the annualised 40c/l shown by the IFA to be the break-even point in 2012 with around 38c/l, but have fallen 3-10c/l short in the last five years.

“The winter payments should allow farmers to cover their year-round liquid milk costs. Achieving 40c/l for the 201819 fresh milk production year would require an increase in this year’s winter prices of over 10c/l over last year’s.”

The IFA insisted that milk producers had to secure higher margins, and that retailers had to halt the “aggressive discounting” of fresh milk.

“This year has been exceptionally tough for farmers and their finances. They will need higher winter payments to offset a 10-13pc lower price base and face the financial consequences of the drought and fodder crisis,” Mr Finn said.

“Retailers must show more solidarity with farmers, and widen their definition of sustainability to include the economic viability of liquid milk producers.”