When prices of dairy products are cut at retail level, it is extremely notable that the only people’s margin affected are dairy farmers, the Irish Creamery Milk Suppliers’ Association (ICMSA) has said.

ICMSA president Denis Drennan was speaking following the announcement over the weekend by three major supermarkets that they were cutting the retail price of milk.

“When the markets are going up, every element of the supply chain makes their margin. When the markets are going down – as at present – the only element in the dairy supply chain that loses financially are the dairy farmers.

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“The economic and compulsory environmental costs to produce a litre of milk are the same, but the price the farmer receives has fallen in the last two months.

“There’s no other sector that can and does experience this kind of precipitous fall in income and it’s exactly this kind of income volatility that is cited by the next generation as the single biggest obstacle to them going into farming,” Drennan added.

The Government had a chance to incorporate a measure to deal with income volatility last week in the budget but, yet again, decided to ignore the problem, the ICMSA president stated.

Agri-Food Regulator

On margins, Drennan said that the farmer’s margin was an “open book” and freely available to anyone to ascertain, while the retailer’s margin seemed a much murkier matter.

He added that Minister for Agriculture Martin Heydon must give the Agri-Food Regulator the necessary powers to publicly state “who is getting what and for what”.

“Farmers work 365 days a year to produce milk for the consumer and it takes the retailer two hours in a fridge to sell it.

“There seems to be an unbelievably lop-sided ‘divvy-up’ of the margins when you consider who has done the work involved in getting that milk to the supermarket fridge.

“Farmers are up against it again and will not be able to take another fall in their prices or income,” Drennan said.