The Irish Farmers' Association (IFA) is urging retailers to return an additional 7c/L to fresh milk farmers this winter to help offset rising input costs. The farm organisation also wants grocers to stock farmer-owned dairy brands and is encouraging consumers to choose milk carrying the National Dairy Council logo.
The IFA said producing 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.
Henry Dunne, the organisation'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. He said the IFA was seeking a fairer share of the existing retail price.
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. The organisation said five major supermarket retailers dominate the grocery market with a combined share of 94%.
The IFA estimated that 70% of retail fresh milk sales are now private label, sold at an average discount of 15% compared with farmer-owned brands. It added that private-label milk sells at a lower price than branded milk.
The organisation linked persistent pressure to cut prices with structural change at farm level. It said there are now 66% fewer fresh milk producers—1,094—than in 1995, when there were 3,344.
The IFA has called on the National Milk Agency to ensure fresh milk farmers are adequately compensated. It has also asked 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.
The IFA's request therefore spans the retail shelf, the processing chain and the farmgate price. It asks retailers to improve the return to farmers, shoppers to consider the origin and branding of fresh milk, and regulators to examine how margins are distributed along the supply chain.
The organisation's figures indicate that private-label milk accounts for most retail fresh milk sales and is sold at a discount to farmer-owned brands. The IFA argues that this pricing structure, combined with a low base milk price, leaves fresh milk producers carrying higher costs without a corresponding share of the retail price.