The Irish Farmers' Association (IFA) has called on retailers to return an additional 7c/L to fresh milk farmers this winter, saying the payment would help offset rising input costs.
The farm organisation also wants grocers to stock dairy brands owned by farmers and is encouraging consumers to choose milk carrying the National Dairy Council logo. It said producing a year-round supply of fresh milk requires extra labour and substantial additional costs.
In a statement on Tuesday, the IFA 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 a considerable decline in the base milk price over the past two years. He said farmers were seeking a fairer share of the existing retail price.
The IFA's request focuses on the liquid milk segment rather than the wider manufacturing milk pool. It argues that processors already pay a liquid milk premium, but that this premium has been weakened as the base price has fallen. The organisation frames the 7c/L as a redistribution of existing retail value rather than relying on a higher shelf price alone.
According to the IFA, seven milk processors handle most of Ireland's fresh milk and pay a premium above the standard manufacturing milk price. It added that five major supermarket retailers dominate the grocery market with a combined share of 94%.
The organisation said an estimated 70% of retail fresh milk sales are now private label, sold at an estimated average discount of 15% compared with farmer-owned brands. Private-label milk sells at a lower price than branded milk, it said. The IFA argues that this retail mix, alongside persistent pressure to cut prices, has squeezed margins for fresh milk producers.
It said there are now 66% fewer producers, at 1,094, than in 1995, when there were 3,344. The organisation presents the decline as evidence of the cumulative effect of margin pressure on the sector.
As part of its response, the IFA has called on the National Milk Agency to ensure fresh milk farmers are adequately compensated. It also wants 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 requests are addressed to that agency and to the Agri-Food Regulator, linking its price concerns to the existing regulatory system for liquid milk.