The Irish Farmers’ Association (IFA) has urged retailers to return an additional 7c/L to fresh milk farmers this winter, arguing that the move would help offset rising input costs.
The farm organisation also called on grocers to stock farmer-owned dairy brands and encouraged consumers to look for milk bearing the National Dairy Council logo. According to the IFA, producing a year-round supply of fresh milk requires extra labour and incurs substantial additional costs.
The association warned that fresh milk farmers are facing higher costs while the farmgate price for milk remains low. Henry Dunne, the IFA’s liquid milk chair, said processors’ premiums for liquid milk production had been eroded by the considerable decline in the base milk price over the past two years.
“A fairer share of the existing retail price is what we are seeking,” Dunne said.
Concentrated retail and processing chain
According to the IFA, seven milk processors handle the majority of Ireland’s fresh milk and pay a premium above the standard manufacturing milk price. Five major supermarket retailers dominate the grocery market with a combined share of 94%, it said.
The organisation estimated that 70% of retail fresh milk sales are now private label, sold at an estimated average discount of 15% compared with farmer-owned brands. Private-label milk sells at a lower price than branded milk, it added.
The IFA said persistent pressure to cut prices had squeezed margins for fresh milk producers to the point that there are now 66% fewer producers (1,094) than in 1995 (3,344).
Its message is aimed at several links in that chain. The IFA wants retailers to adjust how the retail price is shared, processors to maintain a meaningful premium for liquid milk, and regulators to scrutinise margins. It also wants shoppers to recognise farmer-owned brands and the National Dairy Council logo as ways to support fresh milk producers.
Calls to regulators
The organisation called on the National Milk Agency to ensure fresh milk farmers are adequately compensated and on the Agri-Food Regulator to bring transparency to producer, processor and retailer margins.
The National Milk Agency was established under the Milk (Regulation of Supply) Act 1994 to regulate the supply of milk for liquid consumption throughout the state.
Against that backdrop, the IFA’s request focuses on how the existing retail price is divided along the supply chain. The organisation framed the extra 7c/L as part of a fairer share of that price for farmers producing fresh milk for the liquid market.