ICMSA: Milk price reductions are costing Cork farmers half a billion

THE effects of milk price reductions will be felt across West Cork with dairy farmers in the county losing almost half a billion euro in revenue, according to new research. 

The analysis carried out by the Irish Creamery and Milk Suppliers Association (ICMSA) across each county in the 26 counties aimed to establish the reduction in revenues earned by dairy farmers over the last two years. The results show a dramatic drops in milk values with almost €2bn  less expected to be paid to dairy farmers in 2023 versus 2022.

Cork is the county hit hardest, with milk revenue falling from €1.269bn to €777.8bn – a drop of €491.5m. 

ICMSA president Pat McCormack said: ‘This in turn has reduced spending in rural communities by possibly double that amount and it  is going to have a very serious impact not only on the dairy farmers themselves but on the wider rural economy in 2023 and well into 2024’.

The ICMSA’s analysis used an average milk price of 59cpl for 2022 and an expected average price of 37cpl for 2023 with production expected to fall by 2% year on year given the weather and current price conditions. This calculated that almost 38% of dairy revenues have been wiped away in the space of 12 months and this analysis does not include the very severe cost elements facing dairy farmers, meaning that dairy farm incomes will be severely hit in 2023.   While fertilizer has reduced somewhat, most fertiliser was purchased early in the year or last year at inflated prices and unfortunately, electricity and feed remain stubbornly high.  

Mr McCormack said that with West Cork home to many large processors, this is where the multiplier effect can bite even harder with many indirect jobs depending on the dairy sector.

‘2023 has seen very severe cuts to milk price throughout the course of the year and it comes as no surprise to see the spending power of dairy farmers dramatically deteriorate and this is being reported by businesses across rural communities that provide goods and services to dairy farmers and the wider dairy industry,’ said Mr McCormack.   

‘From concrete to shed suppliers, to milking equipment to farm machinery, the reports coming back is that dairy farmers have stopped buying and investing, only the very basics are being purchased and this is going to have a dramatic impact on the local economy.’  

The ICMSA said with an output multiplier of two for dairy, the total deficit from the Irish rural economy could be €4bn for 2023.

Mr McCormack called on Minister for Agriculture Charlie McConalogue to immediately convene a meeting of the Dairy Forum ‘so that a clear strategy can be put in place to kickstart an immediate recovery in milk price which is needed by the farmers who produce the milk on a daily basis but also the wider rural businesses that are dependent on it for their revenues’.