The Irish Farmers' Association (IFA) has called on retailers to return an extra 7c/L to fresh milk farmers this winter, saying the money would help offset rising input costs.
Alongside that request, the farm organisation urged grocery retailers to stock farmer-owned dairy brands and encouraged consumers to look for milk carrying the National Dairy Council logo.
According to the IFA, producing a year-round supply of fresh milk requires "extra labour and incurs substantial additional costs". The organisation warned that fresh milk farmers are facing higher costs at a time when the farmgate price for milk remains low.
Henry Dunne, the IFA's liquid milk chair, said processors' premiums for liquid milk production have been eroded by the considerable decline in the base milk price over the past two years. He said the organisation was seeking "a fairer share of the existing retail price".
Three audiences, one request
The call is directed at three groups: retailers, who are asked to return the additional 7c/L; grocery chains, which are asked to stock farmer-owned dairy brands; and shoppers, who are encouraged to choose milk bearing the National Dairy Council logo.
The IFA's argument turns on the gap between what processors pay for liquid milk and the base milk price. The organisation said seven milk processors handle the majority of Ireland's fresh milk and pay a premium above the standard manufacturing milk price, but it contends that the value of that premium has been reduced as the base price has fallen.
Retail concentration and private label
On the retail side, the IFA said five major supermarket retailers dominate the grocery market with a combined share of 94%.
It estimated that around 70% of retail fresh milk sales are now private label, sold at an average discount of about 15% compared with farmer-owned brands, and said private-label milk sells at a lower price than branded milk.
The organisation said persistent pressure to cut prices has squeezed margins for fresh milk producers to the point that there are now 66% fewer producers – 1,094 – than in 1995, when the total stood at 3,344.
Calls to regulators
The IFA has asked the National Milk Agency to ensure fresh milk farmers are "adequately compensated", and called on 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.