The Irish Farmers' Association (IFA) has called on retailers to return an additional 7c/L to fresh milk farmers this winter, arguing the money is needed to offset rising input costs. The farm organisation said 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. The request is framed around how the existing retail price is divided rather than around what shoppers pay at the till.
Liquid milk premiums under pressure
Henry Dunne, the organisation's liquid milk chair, said processors' premiums for liquid milk production have 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," he said.
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%.
It estimated that around 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, it added, sells at a lower price than branded milk.
Producer numbers down 66%
The IFA said persistent pressure to cut prices has squeezed margins for fresh milk producers to the point that there are now 66% fewer producers than in 1995 — 1,094 compared with 3,344.
Alongside the call on retailers, the organisation urged grocers to stock farmer-owned dairy brands, and encouraged consumers to look for milk bearing the National Dairy Council logo.
Requests to the regulators
The IFA has called on the National Milk Agency to ensure that 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.