IFA national dairy chair Sean O’Leary has called on co-ops to work harder on passing back as much of the dairy upturn as possible to farmers, who after two years of challenging cashflow still have some way to go to rebalance their farm finances.
He said: “In the last two years, the majority of farmers have expanded and all have joined the Sustainable Dairy Assurance Scheme (SDAS), at a major cost to themselves. The 2016 Teagasc National Farm Survey showed that 60% of dairy farms had increased their average on-farm debt to €99,000. This has coincided with a serious dairy price downturn from which farmers are only just emerging.’’
“Based on last year’s supply pattern, 50% of the year’s milk remains to be produced between July and December. Every additional cent co-ops can pass back to farmers as early as possible in that period will make a vital contribution to their financial situation, allowing them to catch up with repayment commitments, including their merchant credit debt to the co-op,’’ O’Leary said.
“It remains a fact that the overall returns from dairy commodities are at a high level.
‘‘Not only are international dairy prices continuing strong for the next six months, EU spot milk prices are at their highest in four years.
“Historically, strong markets have not often coincided with our peak production – farmers must benefit to the fullest extent from the high dairy prices,” Sean O’Leary concluded.