Milk and butter price cuts ‘a kick in the teeth for farmers’
Retail milk and butter price cuts announced today (Thursday, March 26) are “a massive concern” for farmers according to one organisation.
Henry Dunne, Irish Farmers' Association (IFA) Liquid Milk chair, said today that the cuts come at a time when farmers are seeing a major rise in input costs.
He said: “This week we have huge spikes in fertiliser and energy costs and yet the supermarkets have made these cuts this morning.
“The cuts are tone deaf and a kick in the teeth for farmers."
Lidl Ireland today announced it will reduce prices across its own-brand milk and butter range.
The price of a standard two-litre carton of milk will drop to €2.25, while a 454g (1lb) block of Irish creamery butter will be reduced from €3.39 to €2.99.
Also today, Tesco confirmed a new round of price reductions on its own-brand butter and milk.
The supermarket group said the price of a two-litre carton of fresh milk will be cut by 10 cent to €2.35, while a 454g block of Tesco Irish creamery butter will go down by 40 cent to €3.39.
Henry Dunne added: “The reality is that farmers who are set up to produce fresh milk, and therefore have higher costs, have had a very difficult winter with prices falling and costs rising.”
He said the IFA has contacted retailers and processors “seeking an extra 5c/L for producers as we have huge viability issues at farm level”.
“Now instead of passing back a modest increase to farmers, the supermarkets have started a price war on milk and butter.
“Farmers are exiting fresh milk production in significant numbers. Today’s announcement will speed up the exodus.
“Soon, we will not be producing enough milk during the winter months," Dunne said.
Price War
Dunne told Agriland that it is "really disappointed to see the cuts given expenses that liquid farmers are incurring".
“It’s been a challenging six months for liquid. The decrease came in during winter periods - we took a hit.
“Then we’ve come into a wet spring, which hasn’t allowed us to do as much.”
Dunne said that his sector is “hopeful” there will not be a price war among retailers.
However, he added: “It’s likely other retailers will follow suit to avoid loss of market share.”
According to Dunne the price drop is “a massive concern” and a price war would be “disastrous” and “damaging to the sector”.
“We’ve put a lot of work into working with retailers and we applaud them supporting Irish farmers.
“This is a gut punch from them, dropping a price.
“When all costs are going in the wrong direction, we have a low base price," he said.
Geopolitics
Dunne acknowledges that there is a "volatile situation with geopolitical issues" which affect all parts of Irish life currently.
“The reality is the consumers are in this position where food is necessary and the expectation is that it comes at a cost to producers.
“The primary producer – it’s their margin, which is the bottom line, which is effected by this," he said.
