Costs have skyrocketed in the first quarter of this year, yet the money dairy farms are getting for their milk supplies is still bottomed out.

Farmers are well used to volatility and not knowing what their income will look like at the end of each year, or even each month.

However, with volatility dramatically swinging towards high costs and low milk prices at the same time, the phrase "farmers are price takers and not price makers" has once again been highlighted.

In fact, it was a underlying theme among the frustration expressed in the recent fuel protests.

That leaves the question, how much should you be paid for your milk in 2026?

Milk financials

For February 2026 milk supplies, farmers were paid an average base price of 35.29c/L at 3.3% protein and 3.6% fat.

Obviously Irish farmers get paid on A+B-C system, and also have bonuses, but that only brings their actual price up to the mid to low 40s.

In contrast, cost of production was said to be in the region of 37-40c/L for 2025, with some reports indicating it to be even higher than that.

So far in 2026, it is looking like the cost of production will be well into the 40s, and even touching the 50s for some farms.

That is considering how the cost of extra spring feeding will drive up production costs alone, before we ever consider how inflated fertiliser and green diesel prices will affect the rest of the bills.

Yet milk prices are not set to swing favourably until the summer, and maybe even longer if the conflict in the Middle East affects the global markets.

This is leaving a lot of farms in severe 'pinch points', where they are producing milk at a higher cost than what they are selling it at.

Milk price history

If we go back 10 years to 2016, the average milk price was 27.86c/L, but we must remember how poor that price was considered at the time.

Following the abolishment of milk quotas, the country saw an influx of milk, with total production in 2016 rising by 4.4% from 2015 levels.

This resulted in farmers seeing the price they were being paid for milk supplies sink like a lead balloon.

In fact, prices dropped by nearly 42% for 2016 supplies (27.86c/L) when compared to 2014 supplies (39.44c/L).

Yes, the price was poor, but we must also consider that the cost of production only averaged 21.75c/L in 2016.

That meant 78% of the price received for a litre of milk in 2016 was spent on production.

In 2026, the cost of production has doubled and the story is looking a lot different.

Farmers saw a sharp decrease hit in less than a year this time around, with milk prices crashing from an average of 50.14c/L in February 2025 to 35.29c/L in February 2026, a 29.6% drop.

So now if we say it is costing 40c/L flat to produce milk and you are making a maximum price of 43c/L, that means 93% of the pay cheque is going towards the cost of production.

In 2016, a litre of milk in the shop was costing consumers anywhere between €1 and €1.05, while today it is costing €1.15 for own brand milk and up to €1.75 for branded milk.

At the end of the day, every farmer gets a different milk cheque and has different costs, and 2025 was a brilliant year for the dairy industry which will keep a lot of farms afloat, but where should farmers draw the line for the price of milk?