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Irish retailers simply pay dairies too little for liquid milk, IFA national liquid milk chair John Finn told the IFA’s retail event on Tuesday.
Finn said the first condition for farmers to get a fair price from the retail chain was for retailers to pay a wholesale price which guarantees a return for farmers.
“Dairies need to negotiate harder, but retailers must take their responsibility to secure fairness and the sustainability of suppliers. If they fail to do so, I for one would like to see regulation forcing them to.
They need a minimum of 40c/l on average across the year to cover their costs
“Our liquid milk producers are a 10% minority specialised to supply the fresh retail milk market year-round, and their production costs are substantially higher than that of the majority of creamery milk producers.
“[The] IFA has demonstrated that they need a minimum of 40c/l on average across the year to cover their costs and reward their own labour with a modest wage,” Finn said.
Break-even level
In the last couple of years, farmers have received an annual average price for their liquid milk between 6c and 8c per litre below this break-even level, he said.
“They need to be able to secure better winter payments to deal with the much higher cost of keeping cows producing fresh milk over the winter months, and dairies must deliver those right now.
“Kantar World Panel figures suggest that the average retail price for all types of liquid milk is 94c/l, with private-label milk averaging 78c/l.
"This clearly allows for a major shift in margins to pay more to dairies, allowing them to pass on to farmers the stronger winter price they need,” he said.
He said legislation is needed which forces retailers to take responsibility for the fair treatment of primary food producers.
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