Wednesday 28 September 2016

Dairy farmers facing worst slump in more than 10 years

Claire Mc Cormack

Published 06/03/2016 | 02:30

Dairy: Feeling the heat
Dairy: Feeling the heat

Crisis-hit dairy farmers who have seen more than €800m wiped off the sector in 24 months because of the collapse of milk prices are furious over the Government decision not to seek an increase in intervention prices in Brussels - a key aid to bolster incomes.

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The Irish Creamery Milk Suppliers Association (ICMSA) claims prices for milk have fallen by 40pc in two years - leaving dairy farmers facing an average €35,000 income drop.

The Government was expected to strongly lobby Brussels at crunch talks of the EU Farm Council on March 14.

But ICMSA dairy committee chairperson Gerald Quain told the Sunday Independent that the reaction of dairy farmers would be "one of profound disappointment and astonishment" that Ireland was not seeking an increase in the intervention price for butter and SMP (Skimmed Milk Powder).

Increases in intervention prices would help bolster dairy farm incomes in the medium term.

"The question now being asked is whether the Government actually grasps the extent of the crisis facing our dairy farmers who are now approaching peak milk production season and receiving prices below the cost of production," Mr Quain said.

He added that while the proposals set out by the department had some merit, they would not stabilise prices or deliver a price that would cover farmers for the cost of producing milk.

A number of factors have hit milk prices in Europe, including over-production following the end of milk quotas, a slowdown in demand as the Chinese economy contracts, and Russian trade embargoes.

Dairy farmers say this is the worst slump in a decade and the cut in farm incomes may have contributed to Fine Gael's poor showing in its rural heartland in the general election.

ICMSA president John Comer pointed out there was "no sign whatsoever" that election candidates even understood the problems facing Ireland's farmers.

He said that the average price paid to Irish dairy farmers had fallen from 38c a litre in 2014 to today's price of 24-26c a litre.

Most experts put the average cost of producing a litre of milk at 25c.

Mr Quain added: "ICMSA is both disappointed and mystified that Ireland is seemingly intent on turning up to the vital March 14 Farm Council with no clear proposal that will immediately signal to Irish and EU dairy farmers that the extent of the utter collapse in milk price and wiping out of dairy farmers' income is understood and is going to be addressed.

"Instead, we're getting more of the same - more tinkering around the edges of things like storage volumes and time limits without any signal as to how struggling dairy farmers are expected to survive producing below cost."

Sunday Independent

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