A doubling of energy-related processing costs could cost processors an additional €100 per cow in 2022.

A number of milk processors had hedged energy positions in 2021, but since the price hike from mid to late 2021 many have not hedged and now processors have to take the full brunt of the energy cost hikes. Speaking to the Irish Farmers Journal this week, Tipperary Co-op chief financial officer Eamon Doody said it is likely energy and fuel costs for Tipperary Co-op will double from over €7m in 2021 to over €14m in 2022.

Further analysis of the Ornua estimate of energy costs shows it has increased processing costs for 2022 by 3c/l already. Based on future energy prices for 2022, this energy component cost could double again by year end. How this additional cost is shared between processors, farmers and the consumer remains at play.