The Irish Farmers' Association (IFA) has urged grocery retailers to return an additional 7c/L to fresh milk farmers this winter, arguing that producers face higher costs while the farmgate price for milk remains low.
The farm organisation also called on grocers to stock farmer-owned dairy brands, and encouraged consumers to look for milk carrying the National Dairy Council logo. It said that producing a year-round supply of fresh milk requires "extra labour and incurs substantial additional costs".
Henry Dunne, the IFA'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. "A fairer share of the existing retail price is what we are seeking," he said.
Seven processors, five retailers
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. Five major supermarket retailers dominate the grocery market with a combined share of 94%.
The organisation estimated that about 70% of retail fresh milk sales are now private label, sold at an average discount of roughly 15% compared with farmer-owned brands, and that private-label milk sells at a lower price than branded milk.
Producer numbers down 66% since 1995
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, when the total was 3,344.
It has asked the National Milk Agency to ensure fresh milk farmers are adequately compensated, and 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.
Three audiences, one request
The IFA's appeal is structured around three separate audiences: retailers, who are asked to pass back 7c/L and to carry farmer-owned brands; consumers, who are directed towards product bearing the National Dairy Council mark; and the State bodies with responsibility for supply regulation and margin oversight.
Underlying the request is the organisation's argument that the premium paid for liquid milk production has narrowed as the base price fell, leaving the additional costs of year-round fresh milk supply less well covered than before.