The Irish Farmers' Association (IFA) has called on retailers to return an additional 7c/L to fresh milk farmers this winter, saying the move would help offset rising input costs. The farm organisation also urged grocers to stock farmer-owned dairy brands and encouraged consumers to look for milk carrying 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 organisation warned that fresh milk farmers are facing higher costs at a time when 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 a considerable decline in the base milk price over the past two years. He said the organisation was seeking a fairer share of the existing retail price.
The IFA's appeal spans several parts of the supply chain. Retailers are being asked to return more of the retail price to farmers; grocers are being urged to list farmer-owned brands; and consumers are being encouraged to choose milk with the National Dairy Council logo. The organisation linked the request to the extra labour and costs required for year-round fresh milk production.
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. It also said five major supermarket retailers dominate the grocery market, with a combined share of 94%.
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.
According to the farm body, persistent pressure to cut prices has reduced margins for fresh milk producers. It said there are now 66% fewer producers, at 1,094, than in 1995, when there were 3,344. The figures are presented by the IFA as evidence of the pressure on the sector.
The 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.
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 did not set out an implementation mechanism or timetable for its proposed 7c/L return.