IFA national dairy committee Chairman Richard Kennedy claims the current series of Glanbia meetings around the country are being used as “a softening up process” to drastically cut milk prices.
Organised in conjunction with Teagasc and ICBF, the meetings have already taken place in a number of locations, including Dungarvan last Thursday.
Mr Kennedy says the milk prices being “threatened” by Glanbia executives “would not cover the cost of production.” The Tipperary man urged Glanbia board members, “in these times of recession and falling living costs, to demand that wages be cut, and that the top management lead by example.”
At the joint Teagasc/Glanbia meeting in Dungarvan farmers heard from Teagasc’s dairy research officer Brendan Horan that the cost of producing milk on one of the most efficient, and most favourably located farms in Ireland, Curtins Farm in Teagasc Moorepark, was 23c/l.
“In the last 12 months, milk producers have been hit with price cuts of between 10 and 14c/l, an income loss of between €25,000 and €32,000 over a full year’s supply – and this is before production cost increases are factored in,” Mr Kennedy pointed out. “It is clear that with production costs in excess of 23c/l, even the most efficient suppliers simply cannot afford further milk price cuts,” he asserted.
The IFA dairy leader added: “Wages in the dairy industry average around €26/hr for a 40 hour week – around €52,000 per annum. For a very efficient dairy farmer to generate a comparable income with an annual production of 455,000 litres (100,000 gals), they would need to receive a net milk price of 35c/l,” he said.
“Farmers have taken a significant level of pain in the last 12 months. It is high time that pain was shared, and Board members in Glanbia and all other co-ops, whose dairy farming income Teagasc expects will fall by 30% in 2009, should understand this better than anyone. They must get stuck in and demand a root and branch, ruthless hunt for cost at every level of their society.”
Mr Kennedy concluded: “In the current economic context of negative inflation and falling living costs, all private enterprises are having to reduce their wage costs. Glanbia and other co-ops’ board members must insist that farmers have taken more than their share of the market downturn, and demand that wages in their societies are cut, and that the top management lead by example.”