Dairy farmers face €30,000 earnings slump this year
Dairy farmers' earnings will fall by €30,000 each this year due to very low milk prices.
Just as farmers ramp up production to take advantage of the end of EU quotas, they'll get half a billion euros less for their milk than in 2014.
And they're also facing a €100m fine for producing too much milk last year, the Dáil agriculture committee heard.
Dairy farmers are facing a huge cashflow crisis thanks to market weakness, the super-levy bill and money management, said Martin Keane, president of the cooperative umbrella group ICOS.
Average prices this year would be around 27c per litre, which was significantly below the cost of production for many.
"This would represent a loss of €500m in milk receipts relative to 2014, or around €30,000 for the typical supplier," he said.
Dairy farmers were expected to spend a total of €1bn expanding their farms for the post-quota period.
There was also strong anecdotal evidence that many were funding this through cashflow rather than longer-term borrowing.
This meant many had spent the money that could have acted as a buffer against current weak prices, and might also face a large tax bill in the autumn for good incomes in 2013 and 2014.
But Bord Bia chief executive Aidan Cotter said that despite current weakness, there are major long-term opportunities for the sector here, with farmers expected to produce an extra 2bn litres of milk by 2020.
Exports increased 3pc to €3.8bn last year and more than doubled in a decade, with strong growth to China.