The IFA’s dairy committee has published the results of a new milk price analysis, showing “significant” differences between the milk price paid by 11 milk processors nationwide.
It has based the analysis on revenue generated in 2019 and 2020 by a spring-calving herd supplying 500,000 litres a year to their milk processor.
The IFA outlined:
- The farm group has based the exercise on 89 cows producing 500,000l through a spring-calving system using the Teagasc Moorepark spring-calving supply profile;
- It is assumed that each farmer produced milk with average solids each month;
- Any bonuses related to trading activity were excluded. Fixed price schemes and forward price contracts were also excluded;
- 11 of the largest milk processors were compared in this analysis.
According to the farm group, it does not include any trading bonuses, fixed price schemes or forward contracts.
Its 2019 analysis shows a gap of €16,481 between the highest and lowest payers. Meanwhile, in 2020, the gap has widened to €16,896.
The analysis, completed by the Committee with the IFA’s senior dairy policy executive, Aine O’Connell, is based on milk statements supplied by farmers to the dairy committee.
Furthemore, it ranks processors in order of the annual income generated and adjusted for milk constituents.
‘Milk price is effectively the same over the past 30 years’
The chairman of the committee, Stephen Arthur, said the purpose of this analysis is to allow farmers to compare prices paid by milk processors on a like-for-like basis.
“Dairy farmers have been working hard to improve their milk constituents over the years. This can give the impression that milk price has improved, when in reality it’s the milk quality that has improved,” he said.
“This has masked the fact milk price is effectively the same over the past 30 years. We believe the analysis will provide more price transparency, and we plan to publish it on an annual basis,” he added.
IFA president, Tim Cullinan, said that in recent years, the milk price processors pay to farmers has “become increasingly complex” making it difficult to compare prices.
He said the farm group is addressing this issue by conducting this milk price analysis “on a like-for-like basis”, which you can find here.