The Irish Farmers' Association (IFA) has urged retailers to return an additional 7c/L to fresh milk farmers this winter, arguing the money is needed to help offset rising input costs.
The farm organisation said 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.
Processor premiums eroded
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.
Concentrated retail market
The organisation pointed to the structure of the grocery trade, noting that five major supermarket retailers dominate the market with a combined share of 94%.
- An estimated 70% of retail fresh milk sales are now private label;
- private-label milk is sold at an estimated average discount of 15% compared with farmer-owned brands;
- 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.
Producer numbers down sharply
It said there are now 66% fewer fresh milk producers (1,094) than in 1995, when the sector counted 3,344 producers.
Calls to the regulators
The IFA has 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.
Separately, the organisation urged grocers to stock farmer-owned dairy brands and encouraged consumers to look for milk bearing the National Dairy Council logo.