Dairy Farmers Face Rising Costs and Call for Fairer Milk price
ICMSA president Dennis Drennan recently sat down with Agriland to discuss the sobering realities facing dairy farmers in 2024 and their outlook for 2025.
Drennan described 2024 as a “year of three quarters and a quarter,” characterized by unusual weather patterns across the country. South-east Ireland grappled with drought while the north-west struggled with bogged down second cuts. He emphasized that these weather extremes impacted everyone, stalling grass growth and delaying the peak milk production season.
Challenges and A Glimmer of Hope
“No matter where you were, everyone suffered as grass growth was well back and the peak for milk production never came, leaving you behind for the rest of the year,” Drennan said.
While milk prices and weather conditions began to improve at the end of the year, Drennan believes the damage was already done.
He acknowledges that, “It wasn’t a bumper year, but we were saved by the last two months.”
He highlighted the dire situation regarding fodder, stating, “Fodder was scarce and the back end really took pressure off silage pits and slurry tanks. To be honest, it was an absolute lifeline.”
The soaring costs of machinery and contracting added further strain, with Drennan describing them as “bananas money.” He emphasized the urgent need for a new cost base for milk production, moving beyond the outdated baseline of 30-32c/L.
A Plea for Fairer Compensation
Drennan argues that farmers deserve a margin of 20c/L to maintain sustainability. He asks, “Who else is working 60-70 hours a week for less than €100,000?” He stresses that base prices need to exceed 50c/L, potentially reaching 55c/L with solids bonuses, and emphasizes the importance of cost control.
Drennan highlighted the urgency of the situation, stating, “The reality is that food is going to have to get dearer and there is a big deal if food goes up 5-10% but if Spotify and Netflix goes up 20-30%, they are deemed as a necessity. “He appeals to consumers to recognize the increased costs faced by farmers and acknowledges the need for more environmentally sustainable food production, but emphasizes that farmers cannot shoulder the entire financial burden.
Outlook for the Future
Looking at the dairy market, Drennan believes there is no imminent threat to milk supply. He notes that a lack of young heifers coming through globally, including Europe, will likely help maintain demand.
“There are no heifers coming through. Europe is in a dodgy enough position as well and succession is a huge issue,” he stated.
He added, “Generation renewal is a huge problem and you have to ask yourself, who is going to produce the food in the future?”. Drennan underscored that the global demand for dairy products, especially items like cream, butter, and cheese, remains strong, and prices need to reflect this.
He stressed , “The golden goose that is Ornua and Kerrygold can turn into a skinny chicken very fast if you put a 20-40% tariff on it”.
Drennan’s message is clear: Ireland’s dairy farmers require fairer milk prices and increased recognition for the vital role they play in sustainably feeding the world.
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