Collapsing Incomes and Soaring Costs Hit Dairy Sector

IFA Dairy Chair Stephen Arthur said the 2023 Teagasc National Farm Survey showing a 69% drop in dairy incomes over the past 12 months is hugely concerning and points to an impending cashflow crisis in the sector.

Teagasc analysis has also shown that total costs on dairy farms have increased by 56% since 2015. Average dairy family farm income is now back to 2012 levels, with average income per unpaid labour unit of just €34,261, about 30% below the average industrial wage.

“While weather conditions did contribute somewhat to this reduction in income, the reality is that the increased costs imposed on dairy farmers are due mainly to so-called sustainability measures. Policy is driving Ireland’s most profitable farming sector towards financial ruin.”  

“Since the abolition of milk quotas, dairy farmers have invested more than €1.3bn in environmental measures on their farms.  To date, they have absorbed the costs of compliance being asked of them due to increased Government regulation and higher requirements under the Bord Bia Sustainable Dairy Assurance Scheme, but this has to change.  Dairy farmers must now be paid for their actions and measures undertaken at farm level, like in other European countries. They can no longer solely carry these costs. On top of this, we are facing ongoing uncertainty regarding the future of the Nitrates derogation, which is critical for the future of the sector,” he said.

In conclusion, Stephen Arthur said it’s critical that the Government does everything in their power to protect our derogation. Both Bord Bia and processors need to stop passing on compliance costs to dairy farmers without first doing a full analysis of the potential cost they will put on farmers who, unlike others, have nobody to pass these costs onto.