The Irish Farmers’ Association (IFA) has urged retailers to return an additional 7c/L to fresh milk farmers this winter, saying year-round liquid milk production requires extra labour and incurs substantial additional costs while farmgate returns remain low.
The farm organisation also called on grocers to stock farmer-owned dairy brands and encouraged consumers to look for milk bearing the National Dairy Council logo. It warned that fresh milk farmers are facing higher costs at a time when the price paid for their milk is weak.
Processor premiums eroded
Henry Dunne, chair of the IFA’s liquid milk committee, said processors’ premiums for liquid milk production had been eroded by the considerable decline in the base milk price over the past two years. Dunne said farmers were 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 estimated average discount of 15% compared with farmer-owned brands. Private-label milk, it added, sells at a lower price than branded milk.
The organisation’s argument centres on how the retail price is divided. It says processors already pay a liquid milk premium above the manufacturing price, but that the value of this premium has been weakened by the fall in the base milk price. The 7c/L request is presented as a way to direct more of the existing retail price back to farmers.
Shrinking producer base
The organisation said persistent pressure to cut prices had squeezed margins for fresh milk producers. It said there are now 66% fewer producers than in 1995—1,094 compared with 3,344—and linked that decline to the margin pressure.
The figures point to the structure described by the IFA: a small number of processors and retailers sit above a much smaller pool of fresh milk suppliers. The organisation is asking retailers to adjust the share returned to farmers while also asking shoppers to support farmer-owned brands.
Regulatory requests
The IFA called on the National Milk Agency to ensure fresh milk farmers are adequately compensated. It 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 intervention places the debate over fresh milk returns in the wider context of retail concentration and regulatory oversight. Its requests focus on compensation through the National Milk Agency and on making margin distribution more visible through the Agri-Food Regulator.