Responding to moves to lower the farm-gate price of raw milk, Ireland’s farmers have warned that further cuts would “devastate” the industry.
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Irish Farmers Association (IFA) president Padraig Walshe will tell a milk price meeting in Kilkenny this evening (17 February) that the country’s dairy farmers are working for less than the average minimum wage of EUR8.65 per hour.
“Any further cut in milk prices would wipe out the farmer’s wages, not to mention interest payments and bank charges. To prevent dairy farming becoming loss making, the price in 2009 must be in excess of 25 cent per litre. Even at that price, thousands of farmers will go out of business,” Kilkenny warned.
IFA National Dairy Committee chairman Richard Kennedy said that dairy processors must realise that price cuts are doing “irreparable damage” to dairy farmers’ confidence.
The IFA has accused Irish food company Glanbia, in particular, of trying to “soften up” farmers ahead of further milk price cuts after it slashed its prices to 24 cent a litre plus VAT (25.25c/l including VAT) from a 27c/l flat milk price, in December.
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By GlobalDataKerry Group has also announced a cut with 4c/l off the price it paid to suppliers before Christmas. The January price was set at 23.76c/l, VAT exclusive (25c/l including VAT).
“Farmers are the last link in the chain, and while international quotes for fertiliser and feed ingredients have been in free-fall for months, little if any of that has been passed back to them by their merchants and co-ops to alleviate their costs as yet,” Kennedy said.
At the very minimum, he believes co-ops owe it to their suppliers to stop talking down prices and pre-judging markets for 2009, examine milk prices month by month, and reflect fully in their input prices the dramatic fall in international fertiliser and feed ingredient prices.
However, Glanbia chairman Liam Herlihy said: “Milk producers throughout the world are facing similar challenges with market returns well below the production cost in most cases.
“Glanbia is doing all within its power to reduce its operating costs and to improve efficiencies across the group. Our milk suppliers can be assured that we will provide as much assistance as we can to help militate against the severity of the market downturn.”
Walshe has called a dairy industry summit for Thursday (19 February) to decide the priorities for Agriculture Minister Brendan Smith to pursue in Brussels to secure urgent EU dairy market supports.
