Liquid Milk Suppliers Need Premium to Guarantee Supply over Winter Months

IFA Liquid Milk Chair Keith O’Boyle has warned that liquid milk producers will be wiped out if there isn’t an increase in premiums for liquid milk.

Distinct from the majority of milk suppliers, liquid milk producers supply milk all year round for the domestic fresh milk market. Their departure from the sector would threaten fresh milk supply over the winter.

A stark review of costs of production undertaken by James Dunne from Teagasc and published at the Johnstown Open Day, has indicated a 24% increase in the cost of production of liquid milk in 2023 versus 2021. This review does not take recent interest rate hikes into account.

IFA estimate an additional 10cpl premium is required over the six winter months to sustain liquid milk producers and ensure an adequate supply of fresh milk over December and January.

“The vulnerability of the sector will worsen due to changes to the Nitrates derogation regulations, which will push more farmers out of our sector,” he said.

Approximately 270 farmers supply 50% of the entire liquid or fresh milk pool. “We understand that the National Milk Agency is concerned about our fragile supply chain and has written to processors and supermarkets relaying this concern,” he said.

“Unless farmers receive this additional premium of 10cpl over six months, we will witness a mass exodus of farmers from the sector. Our farmers cannot be expected to continue producing fresh milk at a loss,” he concluded.