The Irish Farmers' Association (IFA) is urging retailers to return an additional 7c/L to fresh milk farmers this winter to 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.
The IFA said a year-round supply of fresh milk requires extra labour and incurs substantial additional costs. It warned that fresh milk farmers are facing higher costs while the farmgate price for milk remains low, adding that the pressure comes as producers absorb higher on-farm expenses.
Henry Dunne, the organisation'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. He said the IFA was seeking a fairer share of the existing retail price.
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. The organisation said five major supermarket retailers dominate the grocery market with a combined share of 94%, a concentration it cited as part of its case.
The IFA added that an estimated 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 said, and the organisation linked the structure of the market and persistent price-cutting pressure to a sharp reduction in producer numbers.
The organisation said persistent pressure to cut prices had reduced margins for fresh milk producers to the point that there are now 66% fewer producers than in 1995. It said the number stands at 1,094, compared with 3,344 in 1995.
IFA has called on the National Milk Agency to ensure fresh milk farmers are adequately compensated. It has also asked the Agri-Food Regulator to bring transparency to producer, processor and retailer margins, arguing that a clearer view of how the retail price is distributed is needed.
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. The IFA's requests come as it seeks to highlight the difference between the retail price of fresh milk and the returns available to farmers.