Irish Dairy Farmers Face Income Volatility Amid Processor Pricing Disputes
Ireland’s dairy herd grew by about 42% between 2013 and 2023, according to figures from the Central Statistics Office cited in the analysis. Teagasc’s National Farm Survey also recorded a substantial increase in average herd size during the decade. The expansion increased the country’s milk supply and export capacity, but it did not produce consistently stable returns for farmers.
Farm-gate prices have moved sharply during several periods. In the downturn of 2015–16, base payments from major processors fell into the low-to-mid 20-cent-per-litre range. Further reductions in 2019 and 2021 drew criticism from the Irish Farmers’ Association and the Irish Creamery Milk Suppliers Association. Farmers continued to face expenditure on feed, fertiliser, energy and other inputs while milk prices were being reduced.
The pricing arrangements between Kerry Group and Kerry Co-op became the subject of a separate, long-running dispute. Farmers questioned whether Kerry Group had met its undertaking to provide a leading milk price during the period from 2015 to 2020. Arbitration backed Kerry Co-op’s position. Subsequent negotiations produced a €50m settlement fund, which was paid in 2025 as part of a broader restructuring.
Teagasc data show the scale of the changes in dairy incomes. Average income for a dairy family farm declined from €157,591 in 2022 to €51,122 in 2023. It then rose to €108,536 in 2024 and roughly €153,300 in 2025. The analysis cites a projection that the 2026 average could fall by 42%, to about €80,000, as milk prices weaken and production costs remain high.
Such swings affect decisions about borrowing, expansion, staffing, machinery and longer-term investment. Larger herds can raise production efficiency, while also increasing debt repayments and operating expenses when market conditions weaken. The perishability of raw milk and the need for regular collection can limit the alternatives available to farmers supplying a small number of processors.
Similar concerns have been documented in beef processing. ABP, Kepak and Dawn Meats handle a substantial share of cattle processing, while factory-price comparisons by the Irish Farmers Journal have shown material payment differences between plants for comparable cattle. Dairy and beef use different purchasing systems, but both have prompted discussion of competition and pricing transparency.
Proposals cited in the analysis include clearer information on the calculation of milk prices, bonuses, deductions and contractual commitments. Reporting that links processor returns with farm-gate payments would give suppliers more information when assessing compensation. Stronger producer organisations and fair-dealing rules are also identified as measures that could improve farmers’ negotiating position, while processors would continue to compete in international markets and maintain relationships with milk suppliers.
