Farmers need to learn how to cope with income volatility

CORK Institute of Technology (CIT), working in collaboration with, and with the support of, Cork County Council is in the first stages of developing a dedicated education offering for Cork-based dairy farmers to enable them to acquire a new skillset.

Price-income volatility is an established challenge for the dairy sector. Extremely low dairy product prices cause many financial problems for dairies and farmers and ultimately threaten solvency, while extremely high prices result in product substitution, which can subsequently be difficult or impossible to reverse. 

Meanwhile, dairy product buyers will prefer to conduct business with more price-stable sectors as they prefer stability for planning and customer relationship purposes. Thus, buyers in particular favour fixed price contracts or materials which display lower levels of price variability. Extreme volatility can also hinder research and innovation, while appropriate tools and solutions will enhance sustainability and competitiveness. 

There are many tools which can help to manage volatility. These tools range from diversification, forward contracts, dairy derivative contracts and insurance to policy initiatives. However, each actor in the supply chain will respond to volatility based on their own unique circumstances. 

As such, no one tool is suitable to all members in the supply chain and thus a suite of tools and mechanisms has developed. The use and growth of these tools is conditional on those in the sector understanding their use and role in managing price and income volatility.

CIT’s vice-president for external affairs, Dr Orla Flynn says ‘CIT is delighted to have the support of Cork County Council as we seek to address the education gap in this area.’

Dr Declan O’Connor, a lecturer at CIT, said ‘we are particularly interested in seeking the views of the various stakeholders, including farmers, on the structure and content of these bespoke education offerings.’

In an effort to ascertain as broad a range of views as possible, West Cork-based dairy farmers are being offered the opportunity to attend an information and consultation event on Wednesday next, November 29th, at Fernhill House Hotel,  Clonakilty, from 7.30pm-9.30pm

There will be similar events on Wednesday, December 6th, at the Hibernian Hotel, Mallow, and on Monday 11th at the Radisson Blu Hotel, Little Island.

John Forde of Cork County Council added that ‘Cork County Council is pleased to support Cork Institute of Technology in this initial information and consultation stage. We look forward to the dairy sector, across the county, sharing its views on the possible shape of such offerings.’

No advance reservation is necessary. Queries may be sent to [email protected]