Gerald Quain, Limerick chairman of ICMSA’s national dairy committee
THE County Limerick chairman of ICMSA’s national dairy committee says the milk price cuts announced by Kerry and Glanbia raise “fundamental questions about the continued lack of price transparency and whether parts of the supply chain are benefiting from price volatility.”
Gerald Quain, a dairy farmer in Colmanswell, said the decision of both Glanbia and Kerry Group to cut their milk price for February by 3 c/l and 2 c/l respectively is a major blow to farmer confidence.
“It is especially so as we head into the peak milk production months. It shows scant regard to the challenges facing farmers like the still adverse weather conditions, fodder shortages, and increased input costs.
“There’s a recurring pattern here that has processors imposing more and more standards and conditions on their farmer-suppliers on the basis that we can move up the value chain and achieve higher prices.
“But then you have decisions like these and farmers are justifiably questioning how milk prices can be cut to such an extent and, just as importantly, who is gobbling up the margin that has been taken from the farmers on foot of this decision?” asked Mr Quain.
The Limerick farmer continued by noting that in terms of price volatility the farmer is consistently taking the hammering, “while still waiting for the long-promised and much trumpeted transparency in the food supply chain so that all links in the food supply chain can finally clearly identify exactly who benefits and gains from this volatility”.
“While farmers understand that markets have been under pressure since late 2017, there has been an demonstrable improvement since the start of 2018 and we cannot continue to see farmers – and farmers alone - be completely exposed to a marketplace that is dominated by large multinationals.
“The decisions of Glanbia and Kerry - given their product mix, scale and investment in value added - is hugely disappointing for farmers and the very abrupt and significant scale of the price cut makes a glaring contrast with their actions when milk price was strengthening.
“Farmers have invested heavily to meet milk processor demands and for farmers to be sustainable, they cannot be subjected to further cuts in milk price,” concluded Mr Quain.
Harold Kingston, former chair of the IFA national environment committee, had a very pointed tweet on Tuesday night.
He wrote: “Two weeks ago the shops couldn't keep up with the panic buying of dairy products. This week it's a race to the bottom for milk prices. Some turnaround.” To continue the analogy – the proverb “eaten bread is soon forgotten” springs to mind.
IFA national dairy chairman Tom Phelan said farmers have just gone through a long, cold and wet winter, only to experience an extremely late spring and the most severe snow storm in a generation right in the middle of the 2018 calving period.
“We fully acknowledge that market returns are more challenging, with powder and many other commodities weaker than in 2017, though butter prices have been picking up by €310/t since mid-January.
IFA president Joe Healy said farmers are still dealing with the aftermath of Storm Emma, are counting the cost of this freak event and will need further support to deal with the damage and losses.
He called on the government to provide support to help farmers through the difficulties. Mr Healy also asked insurance companies, banks and others to recognise the difficulties farmers face at this time and ensure they can access necessary finance and compensation quickly.
Meanwhile, the IFA president said the Fodder Transport Scheme is not working and must be revised.
“Fodder shortages will become even more apparent following the recent storm as fodder that would have been available from the south and south-east of the country may now be in doubt.”