ICMSA say farmers supplying 400,000L to Lakelands on course to see 2023 income drop by €48,000.
The President of ICMSA has described the cuts in milk price announced since the start of the year as “absolutely horrendous” and noted that for a farmer supplying 400,000 litres to Lakelands, the drop in revenue for 2023 will be of the order of €48,000. Pat McCormack said that this kind of income hammer blow is unsustainable, and he called on Co-op boards to ‘steady the ship’ on milk price. Mr. McCormack noted that this latest savage cut in milk price came against a background of continuing food inflation at national and EU level with milk, butter and cheese all continuing to rise at retail level. He said that a very simple question now arose: if the consumers across the EU and UK are still paying more for food – including milk, butter and cheese – and with the bulk of Irish dairy exports going to the EU and UK, exactly how do we arrive at cuts in the prices paid to the farmers? Was this, he asked, another example of margin-grabbing and ‘soft selling’ at the expense of farmers?
Mr. McCormack said that farmers understand the dynamics and challenges of the marketplace as well as anybody, but the contrast between the still rising prices paid by consumers and the falling price paid to the farmer means that hard questions need to be asked and answered.
The very first question being where ‘along the line’ had the 12cpl lost by Lakeland suppliers since the start of the year gone? Who has taken this margin?
“Everyone must remember that input costs have not come back to realistic levels, with particularly Irish fertiliser prices way out of kilter with the EU. Electricity and energy prices are still at unacceptably high levels for small businesses like farmers and interest rates continue to increase.
We are only two months into 2023 but the challenges are building, and it is essential that Co-op boards put in place an immediate strategy to bring farm input costs, such as feed and fertiliser, back to realistic levels. The Co-ops boards must demand and get margins from a marketplace which continues to experience inflation, and they must translate the reduction in energy costs that larger businesses are getting – specifically on the gas used for milk processing – into savings that allow them to protect farmer milk price from these kind of savage cuts”, said Mr. McCormack.
The ICMSA President said that targeting milk price was the clear strategy for the milk supplied in January and farmers had every right to expect that that would not be repeated for February supplies. “The margin is there in the market and in the supply chain – the consumer prices and inflation rates prove it. The milk processors are going to have to go after that and maintain the farmer share of the final consumer price”, concluded Mr. McCormack.
Ends 14 March 2023
Pat McCormack, 087-7608958
Cathal MacCarthy, 087-6168758
ICMSA Press Office
+353 (0)61 314677
ICMSA Head Office
John Feely House