Already a substantial gap in 2019 milk price structure

For the past month or so, there has been considerable focus upon the battle that beef farmers are engaged in to try to get a more equitable slice from the profits in the market in which their produce ultimately ends up. But the dairy sector is also fighting to overcome substantial falls in the price being paid for milk.

The July milk prices demonstrate that there is, in reality, a two-tier pricing scheme operating in Ireland the Chairman of the Association’s Dairy Committee, Ger Quain, said. This is immediately apparent in the large gap that has appeared between the top and bottom prices being paid by processors which now stands at over three cents per litre.

Within the debate in which the practice of paying bonuses on whole-year rather than on monthly bases is considered, the divergence actually gets broader, he said.

“If we take that line and examine the 2018 milk price figures as published by KPMG, the difference between top and bottom stands at four cents per litre and amounts to a truly astonishing €16,000 over the course of 2018 for a supply of 400,000 litres. If we look at 2019, this discrepancy is already at over €8,000 for the first seven months of the year for the same supply curve.

“Farmers are asking the same question: How is this possible? Farmer-suppliers are well aware of the uncertainty around international dairy markets at the moment but the ICMSA still feels entitled to ask why there is such shocking differences on what is a homogenous market for homogenous products around the globe?” he asked.

 

Beef Plan has shown direction to farming organisations

A lesson that can be identified as being one that can be drawn from the emergence of the Beef Plan is that when farmers take a united front, things can be made to happen. The people who established the organisation represent one particular element of farming and although virtually every segment in agriculture is in a squeeze situation at the moment (as evidenced in the other items on this page), the Beef Plan has managed to get the factories to the negotiating table.

Getting all farmers to act in consort with one another has always been difficult and those perceived as ‘the enemy’ - the meat factories and retailers in the current circumstance - have enjoyed success in causing division in the farming ranks. In the early general elections in Ireland, the farmer community should have had a TD or two in Kerry but they repeatedly failed to engineer the transfers properly.

Talks continue towards achieving an equitable solution and the Plan’s proposal to appoint ‘an accredited economist’ to produce an equitable division of the retail price of beef and at least provide a stable platform from which things can proceed into the future could be beneficial in the short term. The proposal of a ‘survival line’ of €4 per kilo minimum payment and extracting cash from the government and the EU to create a basic income for beef farmers up until February may be just too tough a chop for the other agencies involved to consume as it would represent a radical alteration to the terms of the market economy.

But it is particularly pertinent in the context of the looming Brexit circumstances.

It took Paddy Finucane to finally make the breakthrough in 1943 and win a seat for the farming sector in Kerry. He certainly made his presence in the Dáil count and he remained there until the 1960s. Perhaps now, with a general election within grasping distance, the Beef Plan can galvanise the agricultural community to get representatives off the land and into Leinster House to ensure that farmers have a voice at the top table.