Editorial: clarity on food price and farmer link essential

I wasn’t in the gate five minutes at Tullamore Show when former IFA presidential candidate and beef and tillage farmer Raymond O’Malley came up to me and said “Jack I was getting the same for barley 41 years ago as I am today”.

We lightened the conversation with small talk of harvest 2025 pleasure and how machinery has made the job so much easier. This stirred O’Malley again. “In 1984, I was getting £153/t for barley (€190/t). That year I bought a new four-wheel drive Fendt tractor and it took 150t of barley to pay for it. If I bought the same tractor today, it would take 1,500t of barley to pay for it.” This anecdote is the first key message and a reminder that yes, technology has improved harvesting ability, but at a cost.

The same in the dairy world, but what good is that if the resulting margin per acre is negative? Margin is everything for every farmer, not price per tonne or price per litre.

More importantly, the above shows that on a short time scale, food inflation may be real for some products, but widen the lens to 10, 20, 30 years back, and it quickly becomes apparent where farmers stand on output prices relative to annual inflation.

For years, prices never moved.

Trump Putin meeting

US wheat futures edged higher to $5.05 per bushel last Friday as traders closely monitored US President Donald Trump’s meeting with Russian President Vladimir Putin in Alaska. Both countries are major grain exporters. Russia’s 2025 wheat production forecast was lifted to 84.5m metric tons, reinforcing a supply glut.

My second message – Irish farmers live in a global market for dairy, grain, beef and sheep. Farmgate milk price is close to 50c/l at the moment. If milk had kept pace with inflation, the price should be closer to 70 c/l. A bottle of water that is pumped out of the ground is now trading at €2/l, relative to a milk retail price of €1.40/l. Think of the toil and risk farmers take on for supermarkets to sell bottled milk at €1.40/l while bottled water sells at €2/litre. Where is the equity in that?

Viennetta was once made with dairy cream, but now it’s cheaper coconut oil. It’s a business decision based on price

Much of the talk in the last week is how one ingredient – cocoa powder – has risen from a relatively stable €2,000/t to nearly €12,000/t. Chocolate prices go up and many consumers think dairy farmers are coining it.

The fact is many of the large chocolate manufacturers have taken milk out of the ingredient mix and replaced it with palm oil or coconut oil instead of dairy cream.

Viennetta was once made with dairy cream, but now it’s cheaper coconut oil. It’s a business decision based on price.

No new varieties

If the farmers of Ireland were to look at margin alone as the one-for-all business measure, there would be no AdBlue, no protected urea, no trailing shoes, no innovation on genetics, no new varieties etc.

Three dairy farmers a week are leaving the sector in the UK and double that are leaving the Irish industry per week. That’s a third clear message – new environmental measures cost real money.

Fourthly, we must tackle the hypocrisy of EU internal standards being undermined by feed imports produced to different standards.

This is real cost and bureaucracy for Irish farmers. We are obliged to track daily every animal born, produced and reared in rural Ireland and yet boatloads of feed land with minor scrutiny. We have beef on sale in Northern Ireland with no label to tell us it is ‘produced on farms fed with GM soya on land which previously grew trees where workers are paid a paltry wage’.

We have a leaky EU trade policy, balancing software sales and rare earth minerals with steak cuts from South America. To cap it all off, we have a proposed 20% cut to the new CAP budget when we require 20% more.

Challenge

There is an obvious need to challenge the European Commission and Minister Heydon on the logic of expecting a reduced CAP budget to be stretched even further. Reducing the environmental footprint of food is not the problem – the real issue is that no one wants to pay for the added cost.

Instead of giving out about the cost of food and blaming farmers, it would be more opportune to ask – are farmers making more than the cost of production? Are annual sales for a farm equating to the minimum wage? Milk, beef, lamb and grain prices rise and fall, input prices used to produce these proteins rise and fall – more compliance seems locked on and that is a real cost for farmers.