The Irish Farmers' Association (IFA) has urged retailers to return an additional 7c/L to fresh milk farmers this winter to help offset rising input costs.
The farm organisation said producing a year-round supply of fresh milk requires "extra labour and incurs substantial additional costs". It warned that fresh milk farmers are facing higher costs at a time when the farmgate price for milk remains low, and it links the request to the winter period and to the year-round nature of liquid milk supply.
Henry Dunne, the organisation'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 added: "A fairer share of the existing retail price is what we are seeking."
Share of the existing price
The request concerns the existing retail price rather than a higher price at the till: the IFA argues that a fairer share of what shoppers already pay should reach producers, and that the premium paid for liquid milk has been squeezed as the base price fell.
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's case rests on that structure, in which a small number of processors and a handful of retailers sit between producers and shoppers.
Concentrated retail market and private label
On the retail side, the IFA said five major supermarket retailers dominate the grocery market with a combined share of 94%.
The organisation estimates 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. Private-label milk sells at a lower price than branded milk, it added.
The IFA 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 figure stood at 3,344. It attributes that decline to the same pressure on price along the chain.
Calls to regulators and shoppers
The IFA has called on the National Milk Agency to ensure fresh milk farmers are adequately compensated, and 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.
Grocers have also been urged to stock farmer-owned dairy brands, while consumers are being encouraged to look for milk bearing the National Dairy Council logo.