Irish Milk Production Decline Spurs Call for Price Increase Amid Rural Economic Impact
Ireland's milk production continues to face significant declines, with the Central Statistics Office (CSO) reporting a decrease of 81 million litres (-7.9%) in April 2024 compared to the same month in 2023, and a drop of 107.6 million litres (-10.2%) from April 2022. From January to April 2024, the total milk intake by co-ops and processors stood at 2,204.6 million litres, marking a reduction of 186.3 million litres (-7.8%). Dairy Industry Ireland (DII) estimates this production shortfall has resulted in direct milk sales losses for farmers amounting to €75-85 million.
Conor Mulvihill, Director of DII, emphasized the broader economic repercussions during his conversation with Farming Independent. He underscored the 'multiplier effect' on rural communities, noting that the lost production has extracted approximately €370 million from the rural economy, based on EY industry research.
"This financial drain affects rural Ireland disproportionately," Mulvihill remarked. "The equivalent loss of three Páirc Uí Chaoimh stadiums in four months follows a similar over 4% drop in milk supply last year."
In response, Stephen Arthur, Chair of the Irish Farmers' Association (IFA) dairy committee, has urged milk processors to raise the prices paid to dairy farmers to offset the decreased supplies. "Milk volumes continue to fall short of 2023 levels, leading to reduced sales for farmers," Arthur stated. "With the compounded impact of high production costs from the challenging spring, farmers need fair compensation, and we believe the market can support this price increase."
Additionally, Ornua's Purchase Price Index (PPI) for May stands at 39.6 c/l, inclusive of VAT, reflecting an increase of 1.1 c/l from April, with the Ornua value payment adding an estimated 2.97 c/l including VAT. This represents a rise of 4.93 c/l in Ornua’s PPI since January.
The continuing decline in milk production and the subsequent economic impact underline the urgent need for strategic responses to stabilize and support Ireland's dairy farmers and rural economies.
"This financial drain affects rural Ireland disproportionately," Mulvihill remarked. "The equivalent loss of three Páirc Uí Chaoimh stadiums in four months follows a similar over 4% drop in milk supply last year."
In response, Stephen Arthur, Chair of the Irish Farmers' Association (IFA) dairy committee, has urged milk processors to raise the prices paid to dairy farmers to offset the decreased supplies. "Milk volumes continue to fall short of 2023 levels, leading to reduced sales for farmers," Arthur stated. "With the compounded impact of high production costs from the challenging spring, farmers need fair compensation, and we believe the market can support this price increase."
Arthur pointed to market improvements as a basis for his argument, citing the recent Global Dairy Trade (GDT) event showing a 1.7% increase compared to the last auction. Butter prices have risen by 1.7% to nearly €7,000 per tonne, while skim milk powder has increased by 3% to €2,722 per tonne.
Additionally, Ornua's Purchase Price Index (PPI) for May stands at 39.6 c/l, inclusive of VAT, reflecting an increase of 1.1 c/l from April, with the Ornua value payment adding an estimated 2.97 c/l including VAT. This represents a rise of 4.93 c/l in Ornua’s PPI since January.
The continuing decline in milk production and the subsequent economic impact underline the urgent need for strategic responses to stabilize and support Ireland's dairy farmers and rural economies.
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