The Irish Farmers' Association (IFA) has called on retailers to return an additional 7c/L to fresh milk farmers this winter, saying the payment 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. It warned that fresh milk farmers are facing higher costs while the farmgate price for milk remains low.
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. According to the IFA, a fairer share of the existing retail price is what the organisation is seeking.
The IFA's statement draws a distinction between the standard manufacturing milk price and the premium paid for liquid milk. It argues that the erosion of that premium has occurred while fresh milk production carries additional year-round costs.
The IFA said seven milk processors handle the majority of Ireland's fresh milk and pay a premium above the standard manufacturing milk price. It added that five major supermarket retailers dominate the grocery market, with a combined share of 94%.
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, according to the organisation. It said private-label milk sells at a lower price than branded milk.
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). The organisation presented the decline in producer numbers as evidence of the pressure facing the sector.
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.
The IFA's request is directed at the share of the existing retail price that reaches farmers. Alongside the 7c/L figure, its calls cover branding, consumer recognition and regulatory scrutiny of margins across the supply chain.